Harrison's fine furnishings manufactures upscale furniture. Harrison's currently uses a plant wide overhead rate based on direct labor hours to allocate it's department overhead rates. Currently the Matching Department incurs $770,000 of manufacturing overhead while the Finishing Department incurs $480.00 of manufacturing overhead. Donna 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.

artmen 1. Compute the plantwide overhead rate assuming that Harrison's expects to incur 31,250 total DL hours during the year . 2. Compute departmental overhead rates assuming that Harrison's expects to incur 15,400 MH in the Machining Department and 16,000 DL hours in the Finishing Department during the year. 3. If Harrison's continues to use the plantwide overhead rate, how much manufacturing overhead would be allocated to Job 450 and Job 455? 4. If Harrison'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 Harrison's sells its furniture at 125% of cost, will its choice of allocation systems affect product pricing? Explain. hd 16, Print Done