Lucatelli Pasta Company prepares, packages, and distributes six frozen pasta entrees in two different Gc Driver Rates container sizes. It prepares the different pastas and different sizes in large batches. It uses a normal job- (LO 2,3,5)

order costing system. Manufacturing overhead is assigned to batches by a predetermined rate on the basis of machine hours. The company incurred manufacturing-overhead costs during two recent years

(adjusted for changes using current prices and wage rates) as follows:

20x5 20x6

|N IBYO NILAYe GIES HOIENEXO en ero cceeneatneec evar teontontee spe ac unecremeetnc ince sane 1,380,000 1,080,000 Manufacturing-overhead costs incurred:

PIONIUIETE atc cop taccd tA Sided aac metl daca te Pec crtaa ae abea ce ne ear rence craerea $ 2,199,000 $ 1,719,000 FUSE NINIOLINO Mes thon. codtmmcernererene cc ada) ofmrte reg RU aenae Heenan sateR een are? 561,000 561,000 SUP OSU UIGIheSCU MAO Olpmeueree- cnosonmaaarem ornee ett asei coc s 11,040,000 8,640,000 EM@lOVESIDEMCNIS <.. et etvset arrestee ctugeinsaneemanaenmatee scerenne ad 4,140,000 3,240,000 SUTSONES Ss aspneezducherter concert isen esanadtte ont aoa eatenH eer msaR DT dewndeancoeEC AAT: 2,760,000 2,160,000 SUPESIVISIOMMAS Bre auras meen saa hate atuatcen eee tite e marta dnits 2,865,000 2,625,000 DEOlECIANOM Meee see een etna tocttmenduccseinestsemeaartteer . 7,930,000 7,930,000 PIO/OC IAW WED EIS, ZINIGI IMSUWIEIMOS.. ocho socenornee canponeersouenceusecesauadanbnne 3,005,000 3,005,000 Total manufacturing-overhead COStS ......ccc enters neees $34,500,000 $29,880,000 Lucatelli Pasta expects to operate at a level of 1.15 million machine hours in 20x7.

Required Using the data from the two previous years, write a report to management that shows the cost-driver rate used to assign manufacturing overhead to its products. Prepare a memo explaining whether it is advisable for Lucatelli Pasta to use an average cost-driver rate for all jobs.