Southwick Products manufactures its products in two separate departments, Machining and Assembly. Total manufacturing overhead costs for the year are budgeted at $1,050,000. Of this amount, the Machining Department Incurs $650,000 (primarily for machine operation and depreciation) while the Assembly Department incurs $400,000. The company estimates that it will incur 5,000 machine hours (all in the Machining Department and 10,000 direct labor hours (2000 in the Machining Department and 8,000 in the Assembly Department) during the year, Click the icon to view the additional information) Requirement 1. Compute the company's current plantwide overhead rate. (Round your answer to the nearon dollar) the near Data Table - X de overhe per D Southwick 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 by Jobs 500 and 501 in each production department: Machining Assembly Department Department ] = Ded = Job 500 --- 5 MH 10 DL hours 1 ... 2 DL hours Job 501 10 MH 10 DL hours 2 DL hours Both Jobs 500 and 501 used $1,000 of direct materials. Wages and benefits total $20 per direct labor hour. Southwick Products prices its products at 110% of total manufacturing costs. one job its curre Print Done 0 Requirements 1. Compute the company's current plantwide overhead rate. 2. Compute refined departmental overhead rates. 3. Which job (Job 500 or Job 501) uses more of the company's resources? Explain. 4. Compute the total amount of overhead allocated to each job if the company uses its current plantwide overhead rate. 5. Compute the total amount of overhead allocated to each job if the company uses departmental overhead rates. 6. Do both allocation systems accurately reflect the resources that each job used? Explain. 7. Compute the total manufacturing cost and sales price of each job using the company's current plantwide overhead rate. 8. Based on the current (plantwide) allocation system, how much profit did the company think it earned on each job? Based on the departmental overhead rates and the sales price determined in Requirement 7, how much profit did it really earn on each job? 9. Compare and comment on the results you obtained in Requirements 7 and 8. De Requirement 1. Compute the company's current plantwide overhead rate. (Round your answer to the nearest dollar) Begin by determining the formula, then compute the rate. Plantwide overhead rate per DL hour Requirement 2. Compute refined departmental overhead rates. Determining the formula, then compute the rates. (Round your answers to the nearest dollar) Departmental overhead rate Machining Assembly per mach hour per DL hour Choose from any list or enter any numho Requirement 3. Which job (Job 500 or Job 501) ne more of the company's resources? Explain of the company's resources machine hour than the other job. The accounting system should show that one job actually the other Requirement 4. Compute the total amount of overhead alocated to each job if the company uses its current plants onts" the company more labor than Job 500 Job 501 costs the company more resources than Total direct labor hours "oost the company the same amount of resources as Planwide location rate Overhead location Raumant Can the wall mount of red with interne denar nunhafta Choose from any list or enter any number in the input fields and then continue to the next question Requirement 4. Compute the total amount of overhead allocated to each job if the company uses its current plantwide overhead rate. Job 500 Total direct labor hours Job 501 Plantwide allocation rate Overhead alocation Requirement 5. Compute the total amount of overhead allocated to each job if the company uses departmental overhead rates. Job 500 Job 501 Overhead allocation - Machining Department Overhead allocation. Assembly Department Total overhead allocation Requirement 6. Do both of the allocation systems accurately reflect the resources each job used? Explain. Choose from any list or enter any number in the Requirement Obhofthewortion of the mechan of the there than Requirement Commenting and the content Jab The trembly tours rebon extromethine how Martin The more Choose from any or any number in the outdoor Requirement 8. Based on the current (plantwide) allocation system, how much profit did the company think it earned on each job? Calculate the gross profit using the current cosing system. Job 500 Job 501 I Sales price Leas: Total manufacturing costs Gross profit (loss) Choose from any list or enter any number in the input fields and then continue to the next question Job 500 Job 501 Sales price Less: Total manufacturing costs Gross profit (loss) Based on the departmental overhead rates and the sales price determined in Requirement 7. how much profit did the company really earn on each job? Calculate the gross profit using the departmental rate costing system. (Use parentheses or a minus sign to show losses.) Job 500 Job 501 Sales price Less: Total manufacturing costs: Direct materials Direct labor Manufacturing overhead Gross profit (loss) Requirement 9. Compare and comment on the results you obtained in Requirements 7 and 8. When utilizing a single rate allocation method, Southwick believes that When utilizing a refined costing method, Southwick realizes that Choose from any list or enter any number in the input fields and the both jobs are equally profitable Job 500 is profitable but Job 501 shows a loss Job 501 is profitable but Job 500 shows a loss