Step $1$: Calculate the estimated total manufacturing overhead cost for each department

Step $2$: Calculate the predetermined overhead rate in each department

Milling

Assembly

Total manufacturing overhead

Total machine$-$hours or direct labor$-$hours

Predetermined overhead rate per machine$-$hour or direct labor$-$hour

Step $3$: Calculate the amount of overhead applied from both departments to Job $407$Which of the following statements is true?

multiple choice $2$

The plantwide overhead rate underestimates the overhead cost per machine$-$hour in Fabrication and overestimates the overhead cost per machine$-$hour in Molding.

The plantwide overhead rate overestimates the overhead cost per machine$-$hour in Fabrication and underestimates the overhead cost per machine$-$hour in Molding.

The plantwide overhead rate overestimates the overhead cost per machine$-$hour in Fabrication and overestimates the overhead cost per machine$-$hour in Molding.

The plantwide overhead rate underestimates the overhead cost per machine$-$hour in Fabrication and underestimates the overhead cost per machine$-$hour in Molding.