Departamental Overhead rates The Dandy Pandas Mexican factory at CDMX has been using a single overhead rate for its entire factory during many years. Due to past relevant OH differences at the variance accounts analysis provided to the Factory Management, an alternative has been proposed: departmental overhead rates. You are given the following information: Three toy products (Dandy Pandas or Product A, Sweety Bees or Product B, and Hug Dogs or Product C) are produced in three departments (1, 2, 3). Labor-hours required for a unit of each product are: TABLE 2: CDMX Dandy Pandas Factory labor hours per product unit Product Department 1 2 3 Total Dandy Pandas (A) ------------------------------- 2 1 1 4 Sweety Bees (B) .. 0 2 2 4 Hug Dogs (C).. 2 3 3 8 Products produced in a normal year were as follows: A: 40,000 units; B: 40,000 units; and C: 10,000 units. Overhead costs incurred in a normal year: department 1: $400,000; department 2: $300,000; and department 3: $100,000. Should the company use a (1) plantwide overhead rate or (2) department overhead rates? Why? In either case, the overhead rate or rates would be based on direct labor-hours.

calculate plantwide overhead rate and department overhead rates.