EXERCISE 2-13 Departmental Predetermined Overhead Rates LO 2-1, LO2-2, LO2-4 White Company has two departments, Cutting and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each department. The Cutting Department bases its rate on machine-hours, and the Finishing Department bases its rate on direct labor-hours. At the beginning of the year, the company made the following estimates: Department Finishing Direct labor-hours Machine-hours Total fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour. Variable manufacturing overhead per direct labor-hour Cutting 6,000 48,000 $264,000 $2.00 30,000 5,000 $30 00 - $4.00 Required: 1. Compute the predetermined overhead rate for each department. 2. The job cost sheet for Job 203, which was started and completed during the year, showed the following: Department Cutting Finishing + - Direct labor-hours Machine-hours Direct materials Direct labor cost 6 80 $500 $108 20 4 $310 $360 Using the predetermined overhead rates that you computed in (1) above, compute the total manufacturing cost assigned to Job 203. 3. Would you expect substantially different amounts of overhead cost to be assigned to some jobs if the company used a plantwide predetermined overhead rate based on direct labor- hours, rather than using departmental rates? Explain. No computations are necessary. EXERCISE 2-14 Job-Order Costing for a Service Company LO2-1, LO2-2, LO2-3 Yancey Productions is a film studio that uses a job-order costing system. The company's direct materials consist of items such as costumes and props. Its direct labor includes each film's actors, directors, and extras. The company's overhead costs include items such as utilities, depreciation of equipment, senior management salaries, and wages of maintenance workers. Yancey applies its overhead cost to films based on direct labor dollars. At the beginning of the year. Yare made the following estimates: Direct labor-dollars to corta. Puccions Fixed overhead cost Variable overhead cost posrece labor dollar . $8,000,000 $4,800,000 $0.05 Required: 1. Compute the predetermined overhead rate. 2. During the year, Yancey produced a film titled You Can Say That Again that incurred the following costs: Direct materials Direct labor cost $1,259.000 $2,400,000 Compute the total job cost for this particular film