102B_Case1_FA20_hints - GROUP GROUP NAME GROUP EXERCISE#1 UGBA102B Fall 2020 \u2013 DEPARTMENTAL COSTING DEPARTMENTAL COSTING LOHAN INDUSTRIES Answer

102B_Case1_FA20_hints - GROUP GROUP NAME GROUP...

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GROUP# __________ GROUP NAME ______________________________________________ GROUP EXERCISE #1 UGBA102B Fall 2020 – DEPARTMENTAL COSTING DEPARTMENTAL COSTING: LOHAN INDUSTRIES Answer the mini-case questions in the spaces below. Do not use online resources to cheat on this case, if you see someone doing this, report them to Professor. QUESTION INFORMATION “Oh no!” said Petros Garvassian, president of Lohan industries. “We’ve just lost the bid on the Harry Morton job by $2,000. “Hey Frank”, he says to his CFO, “maybe we need to take a look at how we do our costing and pricing….!” Lohan Industries operates a job-order costing system (single plantwide MOH calculation) because it manufactures products to customers’ specifications, which might use different materials and labor for each job. Manufacturing overhead cost (assumed to be all fixed) is applied to jobs on the basis of direct labor cost. The company uses a plantwide overhead rate as discussed on page 73 of the book. The following estimates of budgeted MOH and DL$ were made at the beginning of the year: ------------------------DEPARTMENT-------------------------

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