Percival Products manufactures its products in two separate departments: Machining and Assembly. Total manufacturing overhead $680,000 (primarily for machine operation and depreciation) while the Assembly Department incurs $420,000. The company estimate hours (8,000 in the Machining Department and 14,000 in the Assembly Department) during the year. (Click the icon to view the additional information.) Read the requirements. Requirement 1. Compute the compomis auront plentuido Assembly. Total manufacturing overhead costs for the year are budgeted at $1,100,000. Of this amount, the Machining Department incurs incurs $420,000. The company estimates that it will incur 10,000 machine hours (all in the Machining Department) and 22,000 direct labor the year. 00 98825 re 1. Compute the company's current plantwide overhead rate. 2. Compute refined departmental overhead rates. 3. Which job (Job 500 or Job 501) uses more of the company's resources? Explain. 4. Compute the total amount of overhead allocated to each job if the company uses its current plantwide overhead rate. 5. Compute the total amount of overhead allocated to each job if the company uses departmental overhead rates. pla the 6. Do both allocation systems accurately reflect the resources that each job used? Explain. ver 7. Compute the total manufacturing cost and sales price of each job using the company's current plantwide overhead rate. 8. Based on the current (plantwide) allocation system, how much profit did the company think it earned on each job? Based on the departmental overhead rates and the sales price determined in Requirement 7, how much profit did it really earn on each job? 9. Compare and comment on the results you obtained in Requirements 7 and 8. CELED Requirement 1. Compute the company's current plantwide overhead rate. (Round your answer to the nearest dollar) Begin by determining the formula, then compute the rate. Plantwide overhead rate per DL hour Requirement 2. Compute refined departmental overhead rates. Determining the formula, then compute the rates. (Round your answers to the nearest dollar) Machining Assembly Requirement 3. Which job (Job 500 or Job 501) uses more of the company's resources? Explain. of the company's resources. Departmental overhead rate machine hours than the other job. The accounting system should show that one job actually per mach hour per DL hour Assembly Requirement 3. Which job Job 500 or Job 501) unes more of the company's resources? Explain of the company's resources per DL hour machine hours than the other job. The accounting system should show that one job actually Requirement 4. Compute the total amount of overhead allocated to each job if the company uses its current plantwide overhead rate. Job 500 Job 501 Total direct labor hours Plantwide allocation rate Overhead allocation Requirement 5. Compute the total amount of overhead allocated to each job it the company uses departmental overhead rates Job 500 Job 501 the other Requirement 5. Compute the total amount of overhead allocated to each job if the company uses departmental overhead te Overhead allocation Machining Department Job 500 Job 501 Overhead allocation Assembly Department Total overhead allocation Requirement 6. Do both of the allocation systems accurately reflect the resources each job used? Explain The single plantwide overhead rate assigned of overhead to both jobs. The departmental rates assign to Job 501 than Job 500 due to the used. This seems Requirement 7. Compute the total manufacturing cost and sales price of each job uning the company's cument plantwide overhead rate. Rounst amounts to the nearest dolar Enter the percentage a whole number 3 Direct ates De labor Job 500 Job 5011 Time Remaining: 0453.24 Next Calculate the gross profit using the current costing system. Sales price Less: Total manufacturing costs Job 500 Job 501 Gross profit (loss) Based on the departmental overhead rates and the sales price determined in Requirement 7, how much profit did the company really earn on each job? Calculate the gross profit using the departmental rate costing system. Use parentheses or a minus sign to show losses) Sales price Less Total manufacturing costs Direct materials Direct labor Job 500 Job 501 Based on the departmental overhead rates and the sales price determined in Requirement 7, how much profit did the com Calculate the gross profit using the departmental rate costing system. (Use parentheses or a minus sign to show losses.) Job 501 Job 500 Sales price Less: Total manufacturing costs: Direct materials Direct labor Manufacturing overhead Gross profit (loss) Requirement 9. Compare and comment on the results you obtained in Requirements 7 and 8. When utilizing a single rate allocation method, Percival believes that When utilizing a refined costing method, Percival realizes that Dar Data table tio nt vid e. ad d 13 po - X 000. Percival Products currently uses a plantwide overhead rate based on direct labor hours to allocate overhead. However, the company is considering refining its overhead allocation system by using departmental overhead rates. The Machining Department would allocate its overhead using machine hours (MH), but the Assembly Department would allocate its overhead using direct labor (DL) hours. The following chart shows the machine hours (MH) and direct labor (DL) hours incurred by Jobs 500 and 501 in each production department: Machining Department Assembly Department all in Job 500 Job 501 10 MH 5 DL hours 20 MH 5 DL hours 12 DL hours 12 DL hours Both Jobs 500 and 501 used $1,800 of direct materials. Wages and benefits total $30 per direct labor hour. Percival Products prices its products at 110% of total manufacturing costs