“Blast it!” said David Wilson, president of Teledex Company.“We’ve just lost the bid on the Koopers job by $2,000. It seemswe’re either too high to get the job or too low to make any moneyon half the jobs we bid.” Teledex Company manufactures products tocustomers’ specifications and uses a job-order costing system. Thecompany uses a plantwide predetermined overhead rate based ondirect labor cost to apply its manufacturing overhead (assumed tobe all fixed) to jobs. The following estimates were made at thebeginning of the year: Department Fabricating Machining AssemblyTotal Plant Manufacturing overhead $ 353,500 $ 404,000 $ 90,900 $848,400 Direct labor $ 202,000 $ 101,000 $ 303,000 $ 606,000 Jobsrequire varying amounts of work in the three departments. TheKoopers job, for example, would have required manufacturing costsin the three departments as follows: Department FabricatingMachining Assembly Total Plant Direct materials $ 3,200 $ 200 $1,600 $ 5,000 Direct labor $ 3,200 $ 500 $ 6,400 $ 10,100Manufacturing overhead ? ? ? ? Required: 1. Using the company'splantwide approach: a. Compute the plantwide predetermined rate forthe current year. b. Determine the amount of manufacturing overheadcost that would have been applied to the Koopers job. 2. Supposethat instead of using a plantwide predetermined overhead rate, thecompany had used departmental predetermined overhead rates based ondirect labor cost. Under these conditions: a.Compute thepredetermined overhead rate for each department for the currentyear. b. Determine the amount of manufacturing overhead cost thatwould have been applied to the Koopers job. 4. Assume that it iscustomary in the industry to bid jobs at 150% of totalmanufacturing cost (direct materials, direct labor, and appliedoverhead). a.What was the company’s bid price on the Koopers jobusing a plantwide predetermined overhead rate? b.What would the bidprice have been if departmental predetermined overhead rates hadbeen used to apply overhead cost?