Chesbro Inc., manufactures customized pressure washers. The washers pass through two departments: fabrication and painting. Chesbro uses a normal costing system. Estimated overhead and direct labor hours for the year are as follows:

Job 416 required $57 of direct materials and $45 direct labor (3 hours in Fabrication and 1 hour in Painting).
Required:
1. Compute the predetermined overhead rate, based on direct labor hours, for the plant as a whole. What is the total cost of Job 416 using this rate?

2. Compute predetermined overhead rates, based on direct labor hours, for each depart¬
ment. What is the total cost of Job 416 using these rates?
3. Should Chesbro use one plantwide overhead rate or use departmental overhead rates?
Explain.

Transcribed Image Text:

Fabrication Painting Estimated overhead $20,000 $36,250 Estimated direct labor hours 10,000 5,000