1. Assume Jolly has historically used a plant wide 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 Jolly uses a markup percentage of 200% of its total manufacturing cost, what selling price would it establish for Job 550?

2. Assume Jolly's controller believes that machine-hours is a better allocation base than direct labor-hours. Under this approach:
a. Compute the plantwide predetermined overhead rate.
b. Compute the total manufacturing cost of Job 550.
c. If Jolly uses a markup percentage of 200% of its total manufacturing cost, what selling price would it establish for Job 550?
1. Assuming a plant wide predetermined overhead rate with direct labor-hours as the allocation base:
a. The plantwide predetermined overhead rate would be $4.00 per direct labor-hour ($184,000 / 140,000).
b. Total manufacturing cost of Job 550 would be $505 (175 + 225 + (15 * $4) + (5 * $4)).
c. With a 200% markup, Jolly would establish a selling price of $1,515 for Job 550.

2. Assuming a plant wide predetermined overhead rate with machine-hours as the allocation base:
a. The plantwide predetermined overhead rate would be $2.00 per machine-hour ($184,000 / 70,000).
b. Total manufacturing cost of Job 550 would be $490 (175 + 225 + (15 * $2) + (5 * $4)).
c. With a 200% markup, Jolly would establish a selling price of $1,470 for Job 550.