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	Finishing
Direct labor-hours	6,000	30,000
Machine-hours	48,000	5,000
Total fixed manufacturing overhead cost	$ 264,000	$ 366,000
Variable manufacturing overhead per machine-hour	$ 2.00
Variable manufacturing overhead per direct labor-hour		$ 4.00

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	Finishing
Direct labor-hours	6	20
Machine-hours	80	4
Direct materials	$ 500	$ 310
Direct labor cost	$ 108	$ 360

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?

Required 1

Compute the predetermined overhead rate for each department. (Round your answers to 2 decimal places.)

	Cutting Department		Finishing Department
Predetermined overhead rate		per MH		per DLH

required 2

Using the predetermined overhead rates that you computed in requirement (1), compute the total manufacturing cost assigned to Job 203. (Round intermediate calculations to 2 decimal places and final answer to the nearest dollar amount.)

	Total manufacturing cost

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?

I believe it would be yes? options are yes and no