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: 95,000
- Machine-hours required to support estimated production: 47,500
- Fixed manufacturing overhead cost: $266,000
- Variable manufacturing overhead cost per direct labor-hour: $2.60
- Variable manufacturing overhead cost per machine-hour: $5.20
During the year, Job 550 was started and completed. The following information is available with respect to this job:
- Direct materials: $273
- Direct labor cost: $237
- Direct labor-hours: 15
- Machine-hours: 51
If I assume that Landen has historically used a plantwide predetermined overhead rate with direct labor-hours as the allocation base. Under this approach:
a. Help me compute the plantwide predetermined overhead rate.
b. Help me compute the total manufacturing cost of Job 550.
c. If Landen uses a markup percentage of 200% of its total manufacturing cost, help me determine what the selling price would be established for Job 550?