O Required Information Hobart Company manufactures attache cases and suitcases. It has five manufacturing departments. The Molding. Component, and Assembly departments convert raw materials Into finished goods; hence, they are treated as operating departments. The Power and Maintenance departments are treated as service departments because they support the three operating departments. Hobart has always used a plantwide predetermined overhead rate with direct labor-hours as the allocation base for product costing purposes. The overhead rate is computed by dividing the company's total estimated overhead cost (across the five manufacturing departments) by the total estimated direct labor-hours to be worked In the three operating departments. The company has been experiencing declining profits; therefore, It is considering switching from plantwide overhead allocation to a departmental approach. Under the departmental approach, the service department costs would be allocated to the three operating departments. Then each operating department would compute its own overhead rate. The overhead rate In Molding would be based on machine-hours and the rates In Component and Assembly would be based on direct labor-hours. The service departments' estimated costs for the coming year are as follows: Service Departments Power Maintenance Variable overhead cost $ 640,090 $ 25,080 Fixed overhead cost 1, 200,080 375,080 Total overhead cost $ 1,840,080 $ 400, 080 The Power Department would allocate its variable costs to the operating departments based on estimated kilowatt hours used and It would allocate its fixed costs based on the percentage of peak-period capacity required. The Maintenance Department would allocate its variable costs to the operating departments based on estimated maintenance hours used and It would allocate its fixed costs based on the percentage of peak-period capacity required.The corresponding data for allocating service department costs to operating departments are as follows: Operating Departments Molding Component Assembly Power department: Estimated kilowatt hours used 36,080 32,090 12, 080 Percentage of peak-period capacity 50% 35% 15% Maintenance Department: Estimated maintenance hours used 9,090 2, 500 1, 080 Percentage of peak-period capacity 70% 20% 10% The company also provided the following estimated data for its three operating departments: Operating Departments Molding Component Assembly Departmental costs: Direct materials $ 1, 630,090 $ 3,090,090 $ 25,080 Direct labor 350,090 2,060, wee 1,300, 080 Manufacturing overhead 1,960,500 1, 620,090 2, 399, 508 Total departmental costs $ 3,940, 500 $ 6,620,090 $ 3,724, 500 Allocation bases: Direct labor-hours 50,080 200,000 150,080 Machine-hours 87,500 12, 500 8Required: 1. Compute the company's predetermined plantwide overhead rate. 2. Assume the company decides to use departmental overhead rates. a. Using the direct method, allocate the variable and fixed service department costs to the operating departments. b. Calculate the predetermined departmental overhead rates for each of the three operating departments. 3. One of Hobart's products is a small attache case that uses the following machine-hours and direct labor-hours In the three operating departments: Direct Labor- Machine-Hours Hours Molding Department 3,090 1,000 Component Department 808 2, 500 Assembly Department 4,080 Total hours 3,808 7, 500 a. Calculate the amount of overhead that would be applied to this attache case using the plantwide approach. b. Calculate the amount of overhead that would be applied to this attache case using the departmental approach. 40. Is the plantwide approach overcosting or undercosting the attache case compared to the departmental approach? Complete this question by entering your answers in the tabs below. Reg 1 Req 2a Req 2b Req 3a Req 3b Req 4a Assume the company decides to use departmental overhead rates. Using the direct method, allocate the variable and fixed service department costs to the operating departments. Power Maintenance Molding Component Assembly