Landen Corporation uses a job-order costing system. At the beginning of the year

Question

Landen Corporation uses a job-order costing system. At the beginning of the year, the company made the following 75,eee 37,58e $225, ee0 $ 1.6e $ 3.20 d product ion Direct labor-hours required to support estimate Machine-hours required to support estimated production Fixed manufacturing overhead cost Variable manufacturing overhead cost per direct labor Variable nanufacturing overhead cost per machine-hour 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 Machine-hours s 178 s 225 15 Required 1. Assume that Landen has historicaly used a plantwide predetermined overhead rate with direct labor-hours as the allocation base Under this approach a. Compute the plantwide predetermined overhead rate.

Explanation / Answer

Question no                       1                       2 Particulars Job 550 Job 550 Direct material cost             178.00             178.00 Direct labor costs             225.00             225.00 Variable manf overhead               16.00               16.00 Fixed manf overhead applied               45.00               30.00 Cost of goods sold             464.00             449.00 100% Margin             464.00             449.00 Bid price             928.00             898.00 Direct labor   Machine hour Fixed manf overhead applied a Estimated costs    2,25,000.00    2,25,000.00 b Recovery hours        75,000.00        37,500.00 c=a/b cost per hour                  3.00                  6.00 d Hours used by job               15.00                  5.00 e=c*d OH applied               45.00               30.00

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