value:
5.00 points
“Blast it!” said David Wilson, president of Teledex Company. “We’ve just lost the bid on the Koopers job by $4,000. It seems we’re either too high to get the job or too low to make any money on half the jobs we bid.” |
Teledex Company manufactures products to customers’ specifications and operates a job order costing system. Manufacturing overhead cost is applied to jobs on the basis of direct labor cost. The following estimates were made at the beginning of the year: |
Department | ||||||||
Fabricating | Machining | Assembly | Total Plant | |||||
Direct labor | $ | 216,000 | $ | 108,000 | $ | 324,000 | $ | 648,000 |
Manufacturing overhead | $ | 378,000 | $ | 432,000 | $ | 97,200 | $ | 907,200 |
Jobs require varying amounts of work in the three departments. The Koopers job, for example, |
Department | ||||||||
Fabricating | Machining | Assembly | Total Plant | |||||
Direct materials | $ | 4,600 | $ | 200 | $ | 3,000 | $ | 7,800 |
Direct labor | $ | 6,000 | $ | 500 | $ | 7,800 | $ | 14,300 |
Manufacturing overhead | ? | ? | ? | ? | ||||
The company uses a plantwide overhead rate to apply manufacturing overhead cost to jobs. |
Required: | |
1. | Assuming use of a plantwide overhead rate: |
a. | Compute the rate for the current year. |
b. | Determine the amount of manufacturing overhead cost that would have been applied to |
2. | Suppose that instead of using a plantwide overhead rate, the company had used a separate predetermined overhead rate in each department. Under these conditions: |
a. | Compute the rate for each department for the current year. |
b. | Determine the amount of manufacturing overhead cost that would have been applied to |
4. | Assume that it is customary in the industry to bid jobs at 150% of total manufacturing cost (direct materials, direct labor, and applied overhead). |
a. | What was the company's bid price on the Koopers job if a plantwide overhead rate had been used to apply overhead cost? |
b. | What would the bid price have been if departmental overhead rates had been used to apply overhead cost? |
5. | At the end of the year, the company assembled the following actual cost data relating to all jobs worked on during the year. |
Department | ||||||||
Fabricating | Machining | Assembly | Total plant | |||||
Direct materials | $ | 206,000 | $ | 17,600 | $ | 130,000 | $ | 353,600 |
Direct labor | 226,000 | 124,000 | 278,000 | 628,000 | ||||
Manufacturing overhead | $ | 389,000 | $ | 468,000 | $ | 86,500 | $ | 943,500 |
a. | Compute the underapplied or overapplied overhead for the year, assuming that a plantwide overhead rate is used. |
b. | Compute the underapplied or overapplied overhead for the year, assuming that departmental overhead rates are used. (Enter overapplied overhead costs as negative amounts and underapplied overhead costs as positive amounts.)
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This is the third time I posted this question please note that the last part which is D was not correct, and it is not
Applied overhead | actual Overhead- | under/over applied overhead | |
Fabricating | $395,500(226000×175%) | $389,000 | $6,500 over applied |
Machining | $496,000(124000×400%) | $468,000 | $28,000 over applied |
Assembly | $83,400(278000×30%) | $86,500 | $3,100 underapplied |
Total | $974,900 | $943,500 | $31,400 over applied |
please correct it