"Don't tell me we've lost another bid!" exclaimed Janice Hudson, president of Prime Products Inc. "I'm afraid so," replied Doug Martin, the operations vice president. "One of our competitors underbid us by about $10,000 on the Hastings job." "I just can't figure it out." said Hudson. "It seems we're either too high to get the job or too low to make any money on half the jobs we bid. What's happened?" Prime Products manufactures specialized goods to customers' specifications and operates a job order costing system. Manufacturing overhead cost is applied to jobs on the basis of direct labour cost. The following estimates were made at the beginning of the year: Department Direct labour Manufacturing overhead Cutting $ 301,500 $ 542,700 Machining $ 201,000 $ 804,000 Assembly $402,000 $100,500 Total Plant $ 904,500 $1,447,200 Jobs require varying amounts of work in the three departments. The Hastings job, for example, would have required manufacturing costs in the three departments as follows: Department Cutting $ 12,800 $ 7,000 Machining $ 1,000 $ 1,900 Assembly $ 5,800 $ 13,600 Total Plant $ 19,600 $ 22,500 Direct material Direct labour Manufacturing overhead The company uses a plantwide overhead rate to apply manufacturing overhead cost to jobs. Required: 1. Assuming the use of a plantwide overhead rate! a. Compute the rate for the current year Required: 1. Assuming the use of a plantwide overhead rate: a. Compute the rate for the current year Predetermined overhead rate % b. Determine the amount of manufacturing overhead cost that would have been applied to the Hastings job. Manufacturing overhead cost 2. Suppose that instead of using a plantwide overhead rate, the company had used a separate predetermined overhead rate in each department Under these conditions: a. Compute the rate for each department for the current year. Predetermined Overhead Rate Cutting department Machining department Assembly department