3. Ryan Fabrication produces small electronic components for sale to other manufacturers. There are two fabrication departments. The primary cost driver of the Machining Department is machine hours, and the primary cost driver of the Assembly Department is direct labor hours. Ryan currently uses a plant-wide overhead rate, based on direct labor hours. Ryan is considering switching to the use of departmental overhead rates, and has gathered the following estimates for the year:

Department	Total Estimated Manufacturing Overhead Cost	Total Estimated Direct Labor Hours	Total Estimated Machine Hours
Machining Department	$600,000	3,100	14,500
Assembly Department	$500,000	17,900	0
Total Plant-wide	$1,100,000	21,000	14,500

Job 200, consisting of 1,000 units, was completed at the end of September. The job is priced at $10 per unit. The average labor rate is $20 per hour. Additional information about Job 200:

Department	Actual Direct Materials Used on Job 200	Actual Direct Labor Hours for Job 200	Actual Machine Hours for Job 200
Machining	$1,230	1	1
Assembly	$20	4	0
Total	$1,250	5	1

Compute the amount of manufacturing overhead allocated to Job 200 using the plant-wide overhead rate:

Compute the amount of manufacturing overhead allocated to Job 200 using departmental overhead rates:

Did the use of plant-wide rate over-cost or under-cost Job 200? By how much

What would be the gross profit per unit sold, if the total product cost was calculated using departmental overhead rates