Scout Inc. has two manufacturing departments, the Cutting department and the Finishing department. Currently, the company uses a normal costing system based on a single indirect cost category to allocation manufacturing costs based on machine hours as the allocation base. For 2022, the following was budgeted for the plant:

	Cutting department	Finishing department
Manufacturing overhead costs	$208,000	$240,000
Direct manufacturing labour costs	$160,000	$205,000
Direct manufacturing labour hours	8,000	10,250
Machine hours	40,000	60,000

Required

(A) What is the company's predetermined annual overhead rate?

(B) During the year, the company completed Job 123 and reported the following:

Job 123	Cutting department	Finishing department
Direct materials used	$12,000	$18,000
Direct manufacturing labour costs	$17,000	$15,000
Direct manufacturing labour hours	850	750
Machine hours	3,500	5,200

Compute the manufacturing overhead costs allocated to Job 123.

(C) Compute the total manufacturing cost of Job 123.

(D) Ignore your previous calculations. Assume that the company's cost accountant has approached management about using two manufacturing overhead cost pools with direct labour cost as the cost allocation base for the Cutting department and machine hours as the cost allocation base for the Finishing department. Assuming the company continues to use normal costing, compute the budgeted manufacturing overhead rate for each department.

(E) Using the rates you computed in (D), compute the manufacturing overhead that would be allocated to Job 123.

(F) Using the information from (E), compute the total manufacturing cost of Job 123.

(G) At the end of 2022, the company reported the following actual information for all jobs completed in the year:

	Cutting department	Finishing department
Manufacturing overhead costs incurred	$237,200	$222,400
Direct manufacturing labour cost	$176,000	$189,600
Direct manufacturing labour hours	8,800	9,480
Machine hours	42,500	58,400

Assuming the company uses two manufacturing overhead cost pools to allocate manufacturing overhead costs, compute the over- or underallocated overhead for each department and indicate whether the amount is over- or underallocated.

(H) Which method (single manufacturing overhead cost pool or two manufacturing overhead cost pools) do you recommend for this company? Why? Please explain why your choice is superior to the approach you are not recommending.