Southwest Wood Products has two productiondepartments: 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 yearfollow:

Requirements

(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 Southwest Wood might use the method in part a or the one in part b.