Landen Corporation uses a job-order costing system. At the beginning of the year, the company...
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Landen Corporation uses a job-order costing system. At the beginning of the year, the company made the following estimates: Direct labor-hours required to support estimated production . Fixed manufacturing overhead cost. Variable manufacturing overhead cost per direct labor-hour 1,00,000 . $5,60,000 $2.00 During the year, Job # 550 was started and completed. The following information is available with respect to this job: Direct materials Direct labor cost Direct labor-hours $275 $250 20 Requirements: Assume that Landen has historically used a plantwide predetermined overhead rate with direct labor-hours as the allocation base. a) Compute the plantwide predetermined overhead rate. b) Compute the total manufacturing cost of Job # 550. c) If Landen uses a markup percentage of 200% of its total manufacturing cost, what selling price would it establish for Job # 550?
Landen Corporation uses a job-order costing system. At the beginning of the year, the
company made the following estimates:
Direct labor-hours required to support estimated production .
Fixed manufacturing overhead cost.
Variable manufacturing overhead cost per direct labor-hour
1,00,000
. $5,60,000
$2.00
During the year, Job # 550 was started and completed. The following information is available
with respect to this job:
Direct materials
Direct labor cost
Direct labor-hours
$275
$250
20
Requirements:
Assume that Landen has historically used a plantwide predetermined overhead rate with direct
labor-hours as the allocation base.
a) Compute the plantwide predetermined overhead rate.
b) Compute the total manufacturing cost of Job # 550.
c) If Landen uses a markup percentage of 200% of its total manufacturing cost, what
selling price would it establish for Job # 550?
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