Total 524.000 Question 1 (10 marks) Western Designs manufactures unique furniture for hotels. They use a job costing system where manufacturing overhead is applied based on direct labour costs. There are three departments in the company, Design, Milling, and Upholstery. Below are the labour and overhead estimates in total and by department Based on the estimates for the year, the plant wide overhead rate would be 160% of Direct Labour cost. Total Design Milling Upholstery Direct Labour $1,800,000 $ 600,000 S 400,000 $800,000 Manufacturing Overhead $2,880,000 $1,080,000 $1,600,000 $200,000 Materials and Labour costs for a new job, Job 210, are shown below. Design Milling Upholstery Direct Materials $37,000 $1,800 $11,200 Direct Labour $42,400 $13,000 $3,400 $26,000 Required: a) What would be the overhead rate for each department based on estimated Direct Labour costs and the estimated Manufacturing Overhead costs for the year? b) What is the Total Cost of Job 210 it the overhead rates applied to Job 210 are based on the overhead rate for each department and not the plant wide overhead rate? c) What is the Total Cost of Job 210 if a plant wide overhead rate was applied to Job 210 instead of the departmental overhead rates? d) In your opinion, is it better to use a plant wide overhead rate to apply overhead to each job or to use departmental overhead rates to apply overhead to each job? Explain your answer. Question 2 (4 marks) Required: Answer the following questions: a) What estimate used in process costing is determined by a production manager? b) Explain how this estimate impacts the numbers shown on the balance sheet and on the income statement c) Why might a manager manipulate this estimate