White Company has two departments, Cutting and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each department. The Cutting Department bases its rate on machine-hours, and the Finishing Department bases its rate on direct labor-hours. At the beginning of the year, the company made the following estimates: Department Cutting 8,200 Finishing 83, 000 2, 500 Direct labor-houre Machine-hours Total fixed manufactturing overhead cost Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labor-hour 51,400 380, 000 $ 517,000 3.00 3.75 Required: 1. Compute the predetermined overhead rate for each department. 2. The job cost sheet for Job 203, which was started and completed during the year, showed the following: Department Cutting Pinishing Direct labor-hour Machine-hours Direct materials Direct labor cost 16 88 $720 $370 S 72 $384 Using the predetermined overhead rates that you computed in requirement (1), compute the total manufacturing cost assigned to Job 203. 3. Would you expect substantially different amounts of overhead cost to be assigned to some jobs if the company used a plantwide predetermined overhead rate based on direct labor-hours, rather than using departmental rates? Direct materials S 720 S 370 $ 72 $384 Direct labor cost Using the predetermined overhead rates that you computed in requirement (1), compute the total manufacturing cost assigned to Job 203. 3. Would you expect substantially different amounts of overhead cost to be assigned to some jobs if the company used a plantwide predetermined overhead rate based on direct labor-hours, rather than using departmental rates? Complete the question by entering your answers in the tabs given below. Required 2 Required 3 Required 1 Compute the predetermined overhead rate for each department. (Round your answers to 2 decimal places.) Department Finishing Cutting per DLH per MH Predetermined overhead rate Required 2 Required 1 Machine-hours 88 Direct materials Direct labor cost $720 $ 370 $304 $ 72 Using the predetermined overhead rates that you computed in requirement (1), compute the total manufacturing cost assigned to Job 203. 3. Would you expect substantially different amounts of overhead cost to be assigned to some jobs if the company used a plantwide predetermined overhead rate based on direct labor-hours, rather than using departmental rates? Complete the question by entering your answers in the tabs given below. Required 1 Required 2 Required 3 Would you expect substantially different amounts of overhead cost to be assigned to some jobs if the company used a plantwide predetermined overhead rate based on direct labor-hours, rather than using departmental rates? Yes ONo Required 3 Required 2
