Perreth Products manufactures is products in two separade departments: Machining and Assembly. Total manufacturing overhead costs for the year are budgeted at $1,100,000. Or this amount, the Machining Department incurs $680,000 (primarly for machine operation and depreciation) while the Assembly Department incurs $420,000. The company estimates that it will incur 10,000 machine hours (afl in tho Machining Dopartment) and 22,000 direct labor hours (8,000 in the Machining Department and 14,000 in the Assembly Dopartment) during the year. (Cick the icon to view the additional information) Read the reguirements Data table Perreth 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 bv Jobs 500 and 501 in each production department: Both Jobs 500 and 501 used $1,800 of direct materials. Wages and benefits total $30 per direct labor hour. Perreth Products prices its products at 110% of total manufacturing costs. Begin by determining the formula, then compute the rate. d rate hour Requirement 2. Compute refined departmental overhead rates. Determining the formula, then compute the rates. (Round your answers to the nearest dollar.) Requirement 3. Which job (Job 500 or Job 501) uses more of the company's resources? Explain. of the company's resources. machine hours than the other job. The accounting system should show that one job actually the other. 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 manufacturingroost and sales price of each job using the company's current plantwide overhead rate. (Round amounts to the nearest dollar. Enter the prercentage as a whole number.) Requirement 8. Based on the current (plantwide) allocation system, how much profit did the company think it eamed on each job? Based on the departmental overhead rates and the sales price determined in Requirement 7 , how much profit did the co each job? Calculate the gross profit using the departmental rate costing system. (Use parentheses or a minus sign to show losses. Requirement 9. Compare and comment on the results you obtained in Requirements 7 and 8 . When utilizing a single rate allocation method, Perreth believes that When utilizing a refined costing method, Perreth realizes that
