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Donovan's Fine Furnishings manufactures upscale custom furniture. Donovan's currently uses a plantwide overhead rate based on direct labor hours to allocate its $1,100,000 of manufacturing
Donovan's Fine Furnishings manufactures upscale custom furniture. Donovan's currently uses a plantwide overhead rate based on direct labor hours to allocate its $1,100,000 of manufacturing overhead to individual jobs. However, Donna Fuller, owner and CEO, is considering refining the company's costing system by using departmental overhead rates. Currently, the Machining Department incurs $740,000 of manufacturing overhead while the Finishing Department incurs $360,000 of manufacturing overhead. Donna has identified machine hours (MH) as the primary manufacturing overhead cost driver in the Machining Department and direct labor (DL) hours as the primary cost driver in the Finishing Department. (Click the icon to view the job information.) Read the requirements. Requirement 1. Compute the plantwide overhead rate assuming that Donovan's expects to incur 27,500 total DL hours during the year. First identify the formula, then compute the rate. (Round your answer to the nearest whole dollar.) - Plantwide overhead rate Requirement 2. Compute departmental overhead rates assuming that Donovan's expects to incur 14,800 MH in the Machining Department and 18,000 DL hours in the Finishing Department during the year. First identify the formula, then compute the rate for each department. (Round your answers to the nearest whole dollar.) overhead rate Machining per mach. hour Finishing per DL hour
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