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 labour cost. At the beginning of the year, the company made the following estimates:

DepartmentCuttingFinishingDirect labour-hours5,00021,000Machine-hours45,0003,000Manufacturing overhead cost$382,500$498,000Direct labour cost$75,000$323,400

Required:

1.Compute the predetermined overhead rate to be used in each department.(Round "Cutting Department" answer to 2 decimal places and "Finishing Department" answer to nearest whole percent.)

2.Assume that the overhead rates that you computed in Requirement (1) are in effect. The job cost sheet for job 203, which was started and completed during the year, showed the following:DepartmentCuttingFinishingDirect labour-hours620Machine-hours804Materials requisitioned$500$380Direct labour cost$85$320

Compute the total overhead cost applied to job 203.(Do not round intermediate calculations and round your answer to 2 decimal places.)

3.Would you expect substantially different amounts of overhead cost to be assigned to some jobs if the company used a plantwide overhead rate based on direct labour cost, rather than using departmental rates?

Yes