Jameson's Fine Furnishings manufactures upscale custom furniture. Jameson's currently uses a plantwide overhead rate based on direct labor hours to allocate its $1,290,000 of manufacturing overhead to individual jobs. However, Deana Cermak, owner and CEO, is considering refining the company's costing system by using departmental overhead rates. Currently, the Machining Department incurs $870,000 of manufacturing overhead while the Finishing Department incurs $420,000 of manufacturing overhead. Cermak 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.

The Jameson's 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 2 MH in the Machining Department and 4 DL hours in the Finishing Department (the other DL hour occurred in the Machining Department). Job 455 incurred 4 MH in the Machining Department and 3 DL hours in the Finishing Department (the other two DL hours occurred in the Machining Department).

1. Compute the plantwide overhead rate assuming that Jameson's expects to incur 30,000 total DL hours during the year.

2. Compute departmental overhead rates assuming that Jameson's expects to incur 14,500 MH in the Machining Department and 17,500 DL hours in the Finishing Department during the year.

3. If Jameson's. continues to use the plantwide overhead rate, how much manufacturing overhead would be allocated to Job 450 and Job 455?

4. If Jameson'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 Jameson's sells its furniture at 125% of cost, will its choice of allocation systems affect product pricing? Explain.

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Jamesor's Fine Furnishings manufactures upscale custoen fumiture. Jameson's currently usos a plantwide overhead rate based on diroct labor hours to allocale its $1,290,000 of manufacturin overhead to individual jobs. However, Deana Cermak, owher and CEO, is considering refining the company's costing system by using departmental overhead rates. Currenty, the Machining Department incurs $870,000 of manufacturing cverhead whille the Finishing Department incurs $420,000 of manulacluring overhead. Cermak has identied machine hours (MH) as the peimary manulacturing overhead cost driver in the Machining Department and drect labor (DL) hours as the primaly cost driver in the Finishing Departnent. (1) (Click the loon to view the job information.) Read the toguirements: Requirements Requirement 1. Compute the plantwide ovechead rase assuming that a 1. Compule the plantwide overnead rate assuming that Jameson's expects to incur 30.000 total DC. hours during the year. First identify the formula, then compute the rate. (Riound your answer to 2. Compute departmental overhead rates assuming that Jameson's expects so incur 14.500MH in the Machining Departinent and 17,500 DL hours in the Finishing Department during the year. 3. If Jameson's continues to use the plantwide overhead rate, how much manufocturing overhead would be allocated to Job 450 and 106455 ? 4. If Jameson's uses departmental ovechesd rates, how much manufacturing overhead would be allocaled to Job 450 and Job455 ? 5. Based on your answers to Requirements 3 and 4 , does the plantwide overhead rate cvereost of undercost ether job? Explain. If Jameson's selis is furnture at 125% of cost, will its choice of alocation systoms afect product pricing? Explain