Question

"Blast It" said David Wilson, president of Teledex Company. "We've just lost the bid on the Koopers job by $2,000. 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 uses a job-order costing system. The company uses a plantwide predetermined overhead rate based on direct labor cost to apply its manufacturing overhead (assumed to be all fixed) to jobs. The following estimates were made at the beginning of the year. Manufacturing overhead Direct labor Department Fabricating Machining $ 358,750 $ 410,000 $ 205,000 $ 102,500 Assembly $ 92,250 $ 307,500 Total Plant $ 861,000 $ 615,000 Jobs require varying amounts of work in the three departments. The Koopers job, for example, would have required manufacturing costs in the three departments as follows: Direct materials Direct labor Manufacturing overhead Fabricating $3,500 $3,800 ? Department Machining $ 200 $ 500 ? Assembly $1,900 $6,700 Total Plant $ 5,600 $11,000 A REAS Required: 1. Using the company's plantwide approach: a. Compute the plantwide predetermined rate for the current year b. Determine the amount of manufacturing overhead cost that would have been applied to the Koopers job. 2. Suppose that instead of using a plantwide predetermined overhead rate, the company had used departmental predetermined overhead rates based on direct labor cost. Under these conditions: BAN a. Compute the predetermined overhead rate for each department for the current year. b. Determine the amount of manufacturing overhead cost that would have been applied to the Koopers job. 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 using a plantwide predetermined overhead rate? b. What would the bid price have been if departmental predetermined overhead rates had been used to apply overhead costa Complete this question by entering your answers in the tabs below.

if you can please answer questions 1-4 including the A & B sections that woukd be great! Thank you very much!

Answer 1

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Blast It
Answer 1 a
Calculation of Plant wide OH Rate	Fabricating	Machining	Assembly	Total	Note
Manufacturing overhead	358,750.00	410,000.00	92,250.00	861,000.00	A
Direct Labor	205,000.00	102,500.00	307,500.00	615,000.00	B
Predetermined OH Rate				0.71	C=B/A
Answer 1 b
Allocated OH for Koopers Job	Amount $
Direct Labor	11,000.00				D
Predetermined OH Rate	0.71				See C
Allocated OH	7,857.14				E=C*D
Answer 2 a
Calculation of Departmental OH Rate	Fabricating	Machining	Assembly	Note
Manufacturing overhead	358,750.00	410,000.00	92,250.00	F
Direct Labor	205,000.00	102,500.00	307,500.00	G
Predetermined OH Rate	1.75	4.00	0.30	H=F/G
Answer 2 b
Allocated OH for Koopers Job	Fabricating	Machining	Assembly	Total
Direct Labor	3,800.00	500.00	6,700.00	11,000.00	I
Predetermined OH Rate	1.75	4.00	0.30		See H
Allocated OH	6,650.00	2,000.00	2,010.00	10,660.00	J=H*I
Answer 4 a
Bid price under plant wide OH rate	Amount $
Direct Materials	5,600.00				K
Direct Labor	11,000.00				See I
Allocated OH	7,857.14				See E
Total manufacturing cost	24,457.14				L=K+E+I
Bid price	36,685.71				M= L*150%
Answer 4 b
Bid price under departmental OH rate	Amount $
Direct Materials	5,600.00				See K
Direct Labor	11,000.00				See I
Allocated OH	10,660.00				See J
Total manufacturing cost	27,260.00				N=K+I+J
Bid price	40,890.00				O=N*150%