Isaacson Furnishings manufactures upscale custom furniture. Isaacson Furnishings currently uses a plantwide overhead rate based on direct labour hours to allocate its $1,378,000 of manufacturing overhead to individual jobs. However, Werner Isaacson, owner and CEO, is considering refining the company's costing system by using departmental overhead rates. Currently, the Machining Department incurs $988,000 of MOH while the Finishing Department incurs $360,000 of MOH. Werner has identified machine hours (MH) as the primary MOH cost driver in the Machining Department and direct labour (DL) hours as the primary cost driver in the Finishing Department. (Click the icon to view the job information.) Requirements Requirement 1. Compute the plantwide overhead rate assuming that Isaacson expects to incur 26,000 total DL hours during the year. First select the labels in the formula, and then compute the rate. (Round the plantwide overhead rate to the nearest whole dollar.) = Plantwide overhead rate 1. Compute the plantwide overhead rate assuming that the company expects to incur 26,000 total DL hours during the year. 2. Compute departmental overhead rates assuming that the company expects to incur 19,000 MH in the Machining Department and 18,000 DL hours in the Finishing Department during the year. 3. If the company continues to use the plantwide overhead rate, how much manufacturing overhead would be allocated to Job 450 and Job 455? 4. If Isaacson uses departmental overhead rates, how much MOH 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 the company sells its furniture at 135% of cost, will its choice of allocation systems affect product pricing? Explain. The Isaacson Furnishings plant completed Jobs 450 and 455 on May 15. Both jobs incurred a total of 5 DL hours throughout the entire production process. Job 450 incurred 4 MH in the Machining Department and 4 DL hours in the Finishing Department. Job 455 incurred 5 MH in the Machining Department and 3 DL hours in the Finishing Department. (The other DL hour occurred in the Machining Department.)