Given information: St. Larent Firm uses a job costing system. OH is applied on the basis of DL dollars. At the beginning of 2020, the firm made the following estimates. Actuals as of the end of the year are also reported. Estimates Actuals Direct labour hours 41,000 43,480 Machine hours 207,000 196,600 Direct labour Direct materials Overhead $732,000 863,000 2,457,000 $792,310 858,200 2,491,200 On June 17, Job 403 was begun. It was completed on July 30. It required 5,400 machine hours and 960 DLH. Direct manufacturing costs were DM of $7,800 and DL of $21,210. The job sold for $125,000. On November 11, Job 890 was begun. It was completed on November 21. It required 3,700 machine hours and 1,250 DLH. Direct manufacturing costs were DM of $7,400 and DL of $28,500. The job sold for $130,000. The cost of jobs of jobs 403 od $100,203 and 890 is $131,562 O DM+DL+OH = cost of jobs OH overapplied for the year is $168,234 Actual OH (2491200)- applied OH (2659434)= 168234 . If instead of using DL$ as the OH application base, the firm were to use machine hours. The cost of jobs 403 is $93,106 and 890 is $79,817 DM+ DL + OH = cost of jobs o If machine hours were the OH application base, the amount of OH under applied would be $157,643 Actual OH (2491200)- applied OH (2333557)= 157643 O . Question: When the OH application base is Direct Labour dollars, Job 890 appears to cost more than Job 403. When the OH application based is Machine Hours, Job 890 appears to cost less than Job 403. The cost of Job 403 is much the same no matter which OH application base is used, but the cost of Job 890 changes quite a bit. . . Explain clearly and in detail why this is the case. Given information: St. Larent Firm uses a job costing system. OH is applied on the basis of DL dollars. At the beginning of 2020, the firm made the following estimates. Actuals as of the end of the year are also reported. Estimates Actuals Direct labour hours 41,000 43,480 Machine hours 207,000 196,600 Direct labour Direct materials Overhead $732,000 863,000 2,457,000 $792,310 858,200 2,491,200 On June 17, Job 403 was begun. It was completed on July 30. It required 5,400 machine hours and 960 DLH. Direct manufacturing costs were DM of $7,800 and DL of $21,210. The job sold for $125,000. On November 11, Job 890 was begun. It was completed on November 21. It required 3,700 machine hours and 1,250 DLH. Direct manufacturing costs were DM of $7,400 and DL of $28,500. The job sold for $130,000. The cost of jobs of jobs 403 od $100,203 and 890 is $131,562 O DM+DL+OH = cost of jobs OH overapplied for the year is $168,234 Actual OH (2491200)- applied OH (2659434)= 168234 . If instead of using DL$ as the OH application base, the firm were to use machine hours. The cost of jobs 403 is $93,106 and 890 is $79,817 DM+ DL + OH = cost of jobs o If machine hours were the OH application base, the amount of OH under applied would be $157,643 Actual OH (2491200)- applied OH (2333557)= 157643 O . Question: When the OH application base is Direct Labour dollars, Job 890 appears to cost more than Job 403. When the OH application based is Machine Hours, Job 890 appears to cost less than Job 403. The cost of Job 403 is much the same no matter which OH application base is used, but the cost of Job 890 changes quite a bit. . . Explain clearly and in detail why this is the case