His for Home Run Departmental Overhead Rate: Home Run Practice Problem Fairfield Manufacturing currently allocates manufacturing overhead costs by plant-wide overhead rate using direct labor costs. D. Shim, a controller argues for departmental overhead rates to allocate manufacturing overhead costs to products. For department overhead rates, manufacturing overhead costs are allocated on the basis of machine- hours in the Machining Department and on the basis of direct labor-hours in the Assembly Department. At the beginning of 20x3, the following estimates were provided for the coming year: Machining Assembly Total Direct labor-hours 60,000 120,000 180,000 Machine-hours 160,000 40,000 200,000 Direct labor cost $1,000,000 $1,800,000 2,800,000 Manufacturing overhead costs $840,000 $480,000 1,320,000 During month of the March, The accounting records of the company show the following data for Job #101: Machining Assembly Direct labor-hours 240 140 Machine-hours 120 Direct material cost $600 $400 Direct labor cost $200 $800 Part A) For Fairfield Manufacturing, 1) Compute the plant-wide manufacturing overhead rate? 2) What are the total manufacturing costs of Job #101? 10 His for Home Departmental Overhead Rate Part B) For Department Overhead Rate 1) Compute manufacturing overhead rate for each department. 2) What amount of manufacturing overhead costs will be allocated to Job #101? 3) Amounts at the end of 20x3 are as follows: Machining Assembly Direct labor-hours 60,000 250,000 Machine-hours 170,000 50,000 Direct labor cost $1,000,000 $1,800,000 Manufacturing overhead $900,000 $800,000 costs incurred Compute the under-or over-allocated manufacturing overhead for each department and for the whole plant. Part C) Provide possible reasons why Fairfield Manufacturing uses two different cost allocation rates