4. The company’s bid price was:
Direct materials... $ 4,600
Direct labor... 9,500
Manufacturing overhead applied (above) ... 13,300
Total manufacturing cost ... $27,400
Bidding rate... × 1.5
Total bid price... $41,100
If departmental overhead rates had been used, the bid price would have
been:
Manufacturing overhead applied (above) ... 8,760
Total manufacturing cost ... $22,860
Total bid price... $34,290
Note that if departmental overhead rates had been used, Teledex Com-
pany would have been the low bidder on the Koopers job since the
competitor underbid Teledex by only $2,000.
Problem 3-30 (continued)
b. Department
Fabricating Machining Assembly Total Plant
Actual overhead
cost... $360,000 $420,000 $84,000 $864,000
Applied overhead
cost: ...
$210,000 × 175% .. 367,500
$108,000 × 400% .. 432,000
$262,000 × 30%.... 78,600 878,100
Underapplied (over-
applied) overhead
cost... $ (7,500) $(12,000) $ 5,400 $(14,100)
© The McGraw-Hill Companies, Inc., 2006. All rights reserved.
Solutions Manual, Chapter 3 123
Problem 3-31 (120 minutes)
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