8.Landen Corporationuses a job-order costing system. At the beginning of the year, thecompany made...8.Landen...

Free

90.2K

Verified Solution

Question

Accounting

8.Landen Corporationuses a job-order costing system. At the beginning of the year, thecompany made the following estimates:
Direct labor-hoursrequired to support estimated production 145,000
Machine-hours required to supportestimated production 72,500
Fixed manufacturing overhead cost $ 406,000
Variable manufacturing overhead costper direct labor-hour $ 4.40
Variable manufacturing overhead costper machine-hour $ 8.80
During the year, Job550 was started and completed. The following information isavailable with respect to this job:
Direct materials $ 183
Direct labor cost $ 295
Direct labor-hours 15
Machine-hours 5
Required:
2. Assume thatLanden’s controller believes that machine-hours is a betterallocation base than direct labor-hours. Under this approach:
a. Compute theplantwide predetermined overhead rate.
b. Compute the totalmanufacturing cost of Job 550.
c. If Landen uses amarkup percentage of 200% of its total manufacturing cost, whatselling price would it establish for Job 550?
(Round yourintermediate calculations to 2 decimal places. Round yourPredetermined Overhead Rate answers to 2 decimal places and allother answers to the nearest whole dollar.)

Answer & Explanation Solved by verified expert

4.3 Ratings (810 Votes)

Requirement 2: based on machine hours

[a]

			Molding Department:
A	Variable Overhead rate		$ 8.80
B	Total machine hours		72,500
C = A x B	Total Variable Overhead		$ 638,000
D	Total Fixed Overheads		$ 406,000
E = C+D	Total manufacturing Overhead	$ 1,046,400
F	Total machine hours	72,500
G = E/F	Plant Wide Overhead rate	$ 14.43 [Answer]

[b]

	Job 550

Direct material cost	$ 183
Direct Labor cost	$ 295
Manufacturing Overhead [5 machine hours x $ 14.43]	$ 72
Total manufacturing cost assigned	$ 550 [Answer]

[c]

		Job 550
A	Total manufacturing cost assigned	$ 550
B = A x 200%	Selling Price	$ 1,100 [Answer]

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Transcribed Image Text

In: Accounting8.Landen Corporationuses a job-order costing system. At the beginning of the year, thecompany made...8.Landen Corporationuses a job-order costing system. At the beginning of the year, thecompany made the following estimates:Direct labor-hoursrequired to support estimated production145,000Machine-hours required to supportestimated production72,500Fixed manufacturing overhead cost$406,000Variable manufacturing overhead costper direct labor-hour$4.40Variable manufacturing overhead costper machine-hour$8.80During the year, Job550 was started and completed. The following information isavailable with respect to this job:Direct materials$183Direct labor cost$295Direct labor-hours15Machine-hours5Required:2. Assume thatLanden’s controller believes that machine-hours is a betterallocation base than direct labor-hours. Under this approach:a. Compute theplantwide predetermined overhead rate.b. Compute the totalmanufacturing cost of Job 550.c. If Landen uses amarkup percentage of 200% of its total manufacturing cost, whatselling price would it establish for Job 550?(Round yourintermediate calculations to 2 decimal places. Round yourPredetermined Overhead Rate answers to 2 decimal places and allother answers to the nearest whole dollar.)


Direct labor-hoursrequired to support estimated production		145,000
Machine-hours required to supportestimated production		72,500
Fixed manufacturing overhead cost	$	406,000
Variable manufacturing overhead costper direct labor-hour	$	4.40
Variable manufacturing overhead costper machine-hour	$	8.80


Direct materials	$	183
Direct labor cost	$	295
Direct labor-hours		15
Machine-hours		5