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:

	Department
	Cutting			Finishing
Direct labour-hours		6,500			34,500
Machine-hours		48,750			4,500
Manufacturing overhead cost	$	487,500		$	553,500
Direct labour cost	$	65,000		$	307,500

Required:

1. Compute the predetermined overhead rate to be used in each department. (Round your answers to 2 decimal places.)

	Department
	Cutting		Finishing
Predetermined overhead rate		per MH		% of DLC

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:

	Department
	Cutting			Finishing
Direct labour-hours		8			25
Machine-hours		75			5
Materials requisitioned	$	540		$	350
Direct labour cost	$	88		$	165

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

- Total overhead cost applied:

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

• No