Grange Company has two departments, Stamping and Assembly. The company uses a job-order costing system and computes a predetermined overhead rate in each department. The Stamping Department bases its rate on machine-hours, and the Assembly Department bases its rate on direct labour cost. At the beginning of the year, the company made the following estimates:

	Department
	Stamping			Assembly
Direct labour-hours		40,000			125,000
Machine-hours		300,000			15,000
Manufacturing overhead cost	$	2,550,000		$	4,000,000
Direct labour cost	$	360,000		$	3,200,000

Required:
1.	Compute the predetermined overhead rate to be used in each department. (Round your stamping department answer to 2 decimal places.)

2.	Assume that the overhead rates you computed in (1) above are in effect. The job cost sheet for Job 407, which was started and completed during the year, shows the following:

	Department
	Stamping			Assembly
Direct labour-hours		25			100
Machine-hours		450			20
Materials requisitioned	$	400		$	1,850
Direct labour cost	$	250		$	800

Compute the total overhead cost applied to Job 407.

3.

Would you expect substantially different amounts of overhead cost to be charged to some jobs if the company used a plantwide overhead rate based on direct labour cost instead of using departmental rates?

	Yes
	No