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

6,700

34,700

Machine-hours

49,250

4,700

Manufacturing overhead cost

$

502,350

$

562,500

Direct labour cost

$

67,000

$

312,500

Required:

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

2.	Assume that the overhead rates that you computed in part (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		85			5
Materials requisitioned	$	490		$	300
Direct labour cost	$	88		$	167

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
	No