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 Ot this amount, the Machining Department incurs $660,000 (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 (2,000 in the Machining Department and 8,000 in the Assembly Department) during the year (Oick the icon to view the additional information) Read the requirements Requirement 1. Compute the company's cume Begin by determining the formula, then comput Data table Southwick Products cumondy 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 (M), 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 incured by Jobs 500 and 501 in each production department Machining Department Assembly Department Jobs 500 4 MH 10 Dou 2D 10 DL hours Requirement 2. Compute refined departmental Determining the formula, then compute the rate Machining Assembly Requirement 3. Which job (Job 500 or Job 50 of the company's resourc machine hours than the r Job 501 8MH 2 DL hours Both Jobs 500 and 501 used $1,000 of direct materiais Wages and benefits total $20 per drect labor hour Southwick Products prices its products at 110% of total manufacturing costs Print Done the other its cument plantwide overhead rate and boogsted ## $1,050,00 his operation and depreciation) while the Assembly Department incurs $400,000. The company estimates that it will inca chining Department) and 10,000 direct labor hours (2,000 in the Machining Department and 8,000 in the Assembly Department) during the year ck the icon to view the additional information.) e ngrements. ement 1. Compute the company's ay determining the formula, then co rement 2. Compute refined departr mining the formula, then compute th 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 eamed 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. ning mbly rement 3. Which job (Job 500 or J of the company's r Print Done the 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 i per mach hour per DL hour Machining Assembly Requirement 3. Which job (Job 500 or Job 501) uses more of the company's resources? Explain of the company's resources. machine hours than the other job. The accounting system should show that one job actually Requirement 4. Compute the total amount of overhead allocated to each job if the company uses its cument plantwide overhead rate Total direct labor hours Plantwide allocation rate: Overhead allocation Job 500 Job 501 Requirement 5. Compute the total amount of overhead allocated to each job if the company uses departmental overhead rates Overhead allocation Machining Department Overhead allocation Assambly Denartment Job 500 Job 501 the other Time Remaining: 03 51.34 Next Click the icon to view the additional information) 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 The single plantwide overhead rate assigned used. This seems of overhead to both jobs. The departmental rates assign to Job 501 than Job 500 due to the Requirement 7. Compute the total manufacturing cost and sales price of each job using the company's cument plantwide overhead rate (Round amounts to the nearest dular Enter the percentage an a whole number) Job 500 Job 501 Direct materials Direct labor Manufacturing overhead Total manufacturing costs Markup for pricing (1) Sales price Requirement & Based on the current (plantwide) allocation system, how much profit did the company think teamed on each job? Calculate the gross profit using the current costing system Job 500 Job 501 Sales price Less Total manufacturing costs Time Remaining: 0351.03 Next Sales price Job 500 Job 501 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 eam on each job? Calculate the gross profit using the departmental rate costing system. (Use parentheses or a minus sign to show losses.) Sales price Job 500 Job 501 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