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Single rate versus departmental rates Eastern Wood Products has two production departments: cutting and assembly. The company has been using a plantwide cost driver rate

Single rate versus departmental rates Eastern Wood Products has two production departments: cutting and assembly. The company has been using a plantwide cost driver rate computed by dividing plantwide overhead costs by total plantwide direct labor hours. The estimates for overhead costs and practical capacity quantities of cost drivers for the current year follow:

Cutting Assembly Total
Manufacturing overhead $25,000 $35,000 $60,000
Direct labor hours 1,000 3,000 4,000
Machine hours 4,000 2,000 6,000

Required (a) Compute the plantwide cost driver rate. (b) Determine departmental cost driver rates based on direct labor hours for assembly and machine hours for cutting. (c) Provide reasons why Eastern Wood might use the method in part a or the one in part b. (I need answer for this sub part specifically )

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