Question 11 Desert and Ice Aussie Limited has two departments - Water and Sand. The company uses a job-order costing system. The company manufactures luxury yachts for Australians to sink. The company currently computes a predetermined overhead rate for the overall plantwide based on labour-hours. The company is considering a change to compute predetermined overhead per each department. The Water Department would base its rate on machine-hours and the Sand Department bases its rate on direct labour-hours. At the beginning of the year, the company made the following estimates: Department Water Sand Direct labour-hours 1,000 90,000 Machine-hours 150,000 300 $45,000 $15,000 $3.00 $3.00 Total fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct Labour-hour $11.00 $11.00 During the company complete Job #7777, which was started and completed during the year. The job sheet for Job #7777 is presented as follows: Department Water Sand Direct labour-hours 18 410 Machine-hours 320 8 Materials requisitioned $2,200 $6,500 Direct labour costs $5,500 $1,500 Required: (1) Compute the cost of Job #7777 if pre-determined overhead is calculated based on a plantwide basis. (2) Compute the cost of Job #7777 if pre-determined overhead is calculated based on a department basis