ound overhead rates to the nearest cent.) Problem 5-50 Overhead Rates, Unit Costs Folsom Company manufactures specialty tools to customer order. There are three producing departments. Departmental information on budgeted overhead and various activity measures for the coming year is as follows: Estimated overhead Direct labor hours Direct labor cost Machine hours Welding $220,000 4,500 $90,000 5,000 Assembly Finishing $62,000 $150,000 6,000 $150,000 S120,000 2,000 10,000 1,000 Currently, overhead is applied on the basis of machine hours using a plantwide rate. How- ever, Janine, the controller, has been wondering whether it might be worthwhile to use depart- mental overhead rates. She has analyzed the overhead costs and drivers for the various de departments and decided that Welding and Finishing should base their overhead rates machine hours and that Assembly should base its overhead rate on direct labor hours. Continued)