Evan's Fine Furnishings manufactures upscale custom furniture. Evan's currently uses a plantwide overhead rate based on direct labor hours to allocate its $1,290,000 of manufacturing overhead to individual jobs. However, Debra Burger, owner and CEO, is considering refining the company's costing system by using departmental overhead rates. Currently, the Machining Department incurs $870,000 of manufacturing overhead while the Finishing Department incurs $420,000 of manufacturing overhead. Burger 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 Evan's expects to incur 30,000 total DL hours during the year. First identify the formula, then compute the rate. (Round your answer to the nearest whole dollar.) Total manufacturing overhead Plantwide overhead rate Cost allocation base (estimated) 30,000 $ 1,290,000 = 43 Requirement 2. Compute departmental overhead rates assuming that Evan's expects to incur 14,500 MH in the Machining Department and 17,500 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.) Total department overhead 870,000 Cost allocation base (estimated) 14,500 Departmental overhead rate = $ 60 per mach. hour = $ 24 per DL hour $ Machining Finishing $ 420,000 17,500 Requirement 3. If Evan's continues to use the plantwide overhead rate, how much manufacturing overhead would be allocated to Job 450 and Job 455? First identify the formula, then calculate the amount of manufacturing overhead that would be allocated the jobs if the plantwide overhead rate is used. (Round your answers to the nearest whole dollar.) Requirement 3. If Evan's continues to use the plantwide overhead rate, how much manufacturing overhead would be allocated to Job 450 and Job 455? First identify the formula, then calculate the amount of manufacturing overhead that would be allocated to the jobs if the plantwide overhead rate is used. (Round your answers to the nearest whole dollar.) Manufacturing overhead Plantwide overhead rate Actual use of allocation base = allocated Job 450 43 5 = 215 Job 455 43 5 215 Requirement 4. If Evan's uses departmental overhead rates, how much manufacturing overhead would be allocated to Job 450 and Job 455? Use the following table to calculate the amount of manufacturing overhead that would be allocated to the jobs if the departmental overhead rates are used. (Round your answers to the nearest whole dollar.) Job 450 Job 455 Machining Finishing Total overhead allocation i More Info The Evan's plant completed Jobs 450 and 455 on May 15. Both jobs incurred a total of 5 DL hours throughout the entire production process. Job 450 incurred 2 MH in the Machining Department and 4 DL hours in the Finishing Department (the other DL hour occurred in the Machining Department). Job 455 incurred 4 MH in the Machining Department and 3 DL hours in the Finishing Department (the other two DL hours occurred in the Machining Department). Print Done i X Requirements 1. Compute the plantwide overhead rate assuming that Evan's expects to incur 30,000 total DL hours during the year. 2. Compute departmental overhead rates assuming that Evan's expects to incur 14,500 MH in the Machining Department and 17,500 DL hours in the Finishing Department during the year. 3. If Evan's continues to use the plantwide overhead rate, how much manufacturing overhead would be allocated to Job 450 and Job 455? 4. If Evan's uses departmental overhead rates, how much manufacturing overhead would be allocated to Job 450 and Job 455? 5. Based on your answers to Requirements 3 and 4, does the plantwide overhead rate overcost or undercost either job? Explain. If Evan's sells its furniture at 125% of cost, will its choice of allocation systems affect product pricing? Explain. Print Done