MANAGERIAL ACCT W/CONNECT >IC<
15th Edition
ISBN: 9781259405303
Author: Garrison
Publisher: MCG
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Chapter 3, Problem 23P
PROBLEM 2—16 Plantwide Predetermined
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 | 140,000 |
| Machine-hours required to support estimated production | 70,000 |
| Fixed manufacturing overhead cost | $784,000 |
| Variable manufacturing overhead cost per direct labor-hour | $2.00 |
| Variable manufacturing overhead cost per machine-hour | $4.00 |
During the year, Job 550 was started and completed. The following information is available with respect to this job:
| Direct materials | $175 |
| Direct labor cost | $225 |
| Direct labor-hours | 15 |
| Machine-hours | 5 |
Required:
- Assume that Landen has historically used a plantwide predetermined overhead rate with direct labor-hours as the allocation base. Under this approach:
- Compute the planide predetermined overhead rate.
- Compute the total
manufacturing cost of Job 550. - If Landen uses a markup percentage of 200% of its total manufacturing cost, what selling price would it establish for Job 550?
- Assume that Landen’s controller believes that machine-hours is a better allocation base than direct labor-hours. Under this approach:
- Compute the planPide predetermined overhead rate.
- Compute the total manufacturing cost of Job 550.
- If Landen uses a markup percentage of 200% of its total manufacturing cost, what selling price would it establish for Job 550?
- Assume that Landen’s controller is right about machine-hours being a more accurate overhead cost allocation base than direct labor-hours. If the company continues to use direct labor-hours as its only overhead cost allocation base what implications does this have for pricing jobs such as Job 550?
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Problem 2-16 (Algo) Plantwide Predetermined Overhead Rates; Pricing [LO2-1, LO2-2, LO2-3]
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
Machine-hours required to support estimated production
Fixed manufacturing overhead cost
Variable manufacturing overhead cost per direct labor-hour
Variable manufacturing 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
$187
$ 370
15
110,000
55,000
$ 308,000
5
$ 3.20
$ 6.40
Required:
1. Assume that Landen has historically used a plantwide predetermined overhead rate with direct labor-hours as the allocation base.
Under this approach:
a. Compute the plantwide predetermined overhead rate.
b. Compute the total manufacturing cost of Job 550.
c. If Landen…
Problem 2-18 (Algo) Plantwide Predetermined Overhead Rates; Pricing [LO2-1, LO2-2, LO2-3]
Landen Corporation uses job-order costing. At the beginning of the year, it made the following estimates:
Direct labor-hours required to support estimated production
Machine-hours required to support estimated production
Fixed manufacturing overhead cost
Variable manufacturing overhead cost per direct labor-hour
Variable manufacturing overhead cost per machine-hour
During the year, Job 550 was started and completed. The following information pertains to this job:
Direct materials
Direct labor cost
Direct labor-hours.
Machine-hours
$ 195
$288
150,000
75,000
$ 420,000
15
5
$ 4.60
$ 9.20
Required:
1. Assume Landen has historically used a plantwide predetermined overhead rate with direct labor-hours as the allocation base.
Under this approach:
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…
Chapter 3 Solutions
MANAGERIAL ACCT W/CONNECT >IC<
Ch. 3.A - Prob. 1ECh. 3.A - Prob. 2ECh. 3.A - Prob. 3ECh. 3.A - PROBLEM 3A-4 Activity-Based Absorption Costing as...Ch. 3.A - Prob. 5PCh. 3.A - CASE 3A-6 Activity-Based Absorption Costing and...Ch. 3.B - Prob. 1ECh. 3.B - Prob. 2ECh. 3.B - Prob. 3PCh. 3.B - Prob. 4C
Ch. 3 - Prob. 1QCh. 3 - Prob. 2QCh. 3 - Prob. 3QCh. 3 - Prob. 4QCh. 3 - Prob. 5QCh. 3 - Prob. 6QCh. 3 - Prob. 7QCh. 3 - Prob. 8QCh. 3 - 3-9 What is underapplied overhead? Overapplied...Ch. 3 - Prob. 10QCh. 3 - Prob. 11QCh. 3 - Prob. 12QCh. 3 - Prob. 13QCh. 3 - This Excel worksheet relates to the Dickson...Ch. 3 - This Excel worksheet relates to the Dickson...Ch. 3 - Prob. 3AECh. 3 - This Excel worksheet relates to the Dickson...Ch. 3 - Prob. 1F15Ch. 3 - Prob. 2F15Ch. 3 - Prob. 3F15Ch. 3 - Prob. 4F15Ch. 3 - Prob. 5F15Ch. 3 - Prob. 6F15Ch. 3 - Prob. 7F15Ch. 3 - Prob. 8F15Ch. 3 - Prob. 9F15Ch. 3 - Prob. 10F15Ch. 3 - Prob. 11F15Ch. 3 - Prob. 12F15Ch. 3 - Prob. 13F15Ch. 3 - Prob. 14F15Ch. 3 - Prob. 15F15Ch. 3 - Prob. 1ECh. 3 - Prob. 2ECh. 3 - Prob. 3ECh. 3 - EXERCISE 24 Computing Total Job Costs and Unit...Ch. 3 - EXERCISE 2-5 Computing Total Job Costs and Unit...Ch. 3 - Prob. 6ECh. 3 - EXERCISE 2-7 Job-Order Costing; Working Backwards...Ch. 3 - Prob. 8ECh. 3 - EXERCISE 3-9 Journal Entries and T-accounts...Ch. 3 - Prob. 10ECh. 3 - Prob. 11ECh. 3 - Prob. 12ECh. 3 - Prob. 13ECh. 3 - Prob. 14ECh. 3 - Prob. 15ECh. 3 - Prob. 16ECh. 3 - Prob. 17ECh. 3 - Prob. 18ECh. 3 - Prob. 19ECh. 3 - EXERCISE 2—13 Departmental Predetermined Overhead...Ch. 3 - EXERCISE 214 Job-Orders Costing for a Service...Ch. 3 - Prob. 22PCh. 3 - PROBLEM 2—16 Plantwide Predetermined Overhead...Ch. 3 - Prob. 24PCh. 3 - Prob. 25PCh. 3 - Prob. 26PCh. 3 - Prob. 27PCh. 3 - PROBLEM 2-21 Plant wide Versus Multiple...Ch. 3 - CASE 2-22 Plantwide versus Departmental Overhead...Ch. 3 - Prob. 30C
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