Uncle Julian's Snacks makes potato chips, corn chips, and cheese puffs using three different production lines within the same manufacturing plant. Currently, Julian uses a single plantwide overhead rate to allocate its $4,005,000 of annual manufacturing overhead. Of this amount, $2,484,000 is associated with the potato chip line, $996,000 with the corn chip line, and $525,000 with the cheese puff line. Uncle Julian plant is currently running a total of 17,800 machine hours: 10,800 in the potato chip line, 4,500 in the corn chip line, and 2,500 in the cheese puff line. Uncle Julian considers machine hours to be the cost driver of MOH costs.

1.	What is Uncle Julian's plantwide overhead rate?
2.	Calculate the departmental overhead rates for Uncle Julian's three production lines. Round all answers to the nearest cent.
3.	Which products are overcosted by the plantwide rate? Which products are undercosted by the plantwide rate?

Requirement 1. What is Uncle JulianUncle Julian's plantwide overhead rate? Determine the formula for calculating the plantwide overhead rate, then calculate the rate.

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Plantwide overhead rate

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Requirement 2. Calculate the departmental overhead rates for Uncle Julian's three production lines. Begin by determining the formula for calculating a department's overhead rate, then calculate the overhead rates for each department. (Round your answers to the nearest cent.)

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Department overhead rate

Potato Chips

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Corn Chips

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Cheese Puffs

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Requirement 3. Which products are overcosted by the plantwide rate? Which products are undercosted by the plantwide rate? For each product, select if it was overcosted or undercosted by using the plantwide rate.

Projduct line Over costed or under costed

Potato chip
Corn Chip
Cheese chip

	Product Line	Overcosted or
		Undercosted
	Potato Chip
	Corn Chip
	Cheese Puffs