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

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

Materials requisitioned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$500 $310

Direct labor cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $108 $360

1. Cutting Department:

The estimated total manufacturing overhead cost in the Cutting Department is computed as follows:

	Estimated fixed manufacturing overhead....................
	Estimated variable manufacturing overhead $2.00 per MH 48,000 MHs...................................
	Estimated total manufacturing overhead cost.............

The predetermined overhead rate is computed as follows:

Estimated total manufacturing overhead (a)..
Estimated total machine-hours (b).................
Predetermined overhead rate (a) (b)..........

Finishing Department:

The estimated total manufacturing overhead cost in the Finishing Department is computed as follows:

	Estimated fixed manufacturing overhead....................
	Estimated variable manufacturing overhead $4.00 per DLH 30,000 DLHs.................................
	Estimated total manufacturing overhead cost.............

The predetermined overhead rate is computed as follows:

Estimated total manufacturing overhead (a)...
Estimated total direct labor-hours (b).............
Predetermined overhead rate (a) (b)...........

2.	Total manufacturing cost assigned to Job 203:
	Direct materials ($500 + $310)..........................
	Direct labor ($108 + $360)................................
	Cutting Department (80 MHs $7.50 per MH)..
	Finishing Department (20 DLH $16.20 per DLH)...............................................................
	Total manufacturing cost...................................

3. Would you expect substantially different amounts of overhead cost to be assigned to some jobs if the company used a plantwide predetermined overheard rate based on direct labor-hours, rather than using departmental rates? Explain. No computations are necessary.