The Old Masters Puzzle Company makes jigsaw puzzles primarily sold in museum gift shops. The manufacturing process includes using the departments related to gluing, cutting, and boxing. Each type of jigsaw puzzle must go through these departments.

The overhead costs in each of these departments are allocated by direct labor hours.

Expected overhead costs and direct labor hours that are used to determine an allocation rate are as follows:

A job of 5,000 jigsaw puzzles requires 10 hours of gluing, 15 hours of cutting, and 12 hours of boxing.

a. How much overhead is allocated to the job, if overhead is allocated by department?

b. How much overhead is allocated to the job, if overhead is allocated by a single company-wide application rate?

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Department Expected Dept. Costs Expected Dept. Direct Labor Hours Gluing Cutting Boxing Total overhead $ 90,000 200,000 110,000 $400,000 10,000 40,000 50,000 100,000