7.23 Plant-wide versus production cost pools L02, 3 Flexible Manufacturers produces small batches of customised products. The accounting system is set up to allocate plant overhead to each job using the following production cost pools and overhead allocation rates. Lebourpeeed assembly $25 per direct labour hour Machinepaced assembly $18 per machine hour Quality testing $ 2 per unit Actual resources used for job "l5: Direct labour hours 3 Machine hours 1.25 Number of units 36 The manufacturing accountant wants to simplify the cost accounting system and use a plantwide rate. If the preceding costs were grouped into a single cost pool and allocated based on labour hours. the rate would be $35 per direct labour hour. Required (a) What cost should be allocated to job 75 using the plantwide overhead rate'?I (b) What cost should be allocated to job 75 using the production cost pool overhead rates? (c) Why do the allocated amounts in parts (a) and (b) differ'Il ((1) Which method would you recommend? Explain your choice. 5 an III-Inow. n' val-\"av\".- nan-Inmnni nul- nu-n-I-lnnal uni-Inn I HR 6