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Donovan's Fine Furnishings manufactures upscale custom furniture. Donovan's currently uses a plantwide overhead rate based on direct labor hours to allocate its $1,170,000 of manufacturing overhead to individual jobs. However, Dana Able, owner and CEO, is considering refining the company's costing system by using departmental overhead rates. Currently, the Machining Department incurs $735,000 of manufacturing overhead while the Finishing Department incurs $435,000 of manufacturing overhead. Able has identified machine hours (MH) as the primary manufacturing overhead cost driver in the Machining Department and direct labor (DL) hours as the primary cost driver in the Finishing Department. (Click the icon to view the job information.) Read the requirements. Requirement 1. Compute the plantwide overhead rate assuming that Donovan's expects to incur 26,000 total DL hours during the year. First identify the formula, then compute the rate. (Round your answer to the nearest whole dollar.) Donovan's Fine Furnishings manufactures upscale custom furniture. Donovan's currently rate based on direct labor hours to allocate its $1,170,000 of manufacturing overhead to Able, owner and CEO, is considering refining the company's costing system by using dep rates. Currently, the Machining Department incurs $735,000 of manufacturing overhead w More info The Donovan's plant completed Jobs 450 and 455 on May 15. Both jobs incurred a total of 5DL hours throughout the entire production process. Job 450 incurred 3MH in the Machining Department and 4DL hours in the Finishing Department (the other DL hquar occurred in the Machining Department). Job 455 incurred 5MH in the Machiring Department and 3 DL hours in the Finishing Department (the other two DL hours occurred in the Machining Department). 1. Compute the plantwide overhead rate assuming that Donovan's expects to incur 26,000 total DL hours during the year. 2. Compute departmental overhead rates assuming that Donovan's expects to incur 15,000MH in the Machining Department and 17,400 DL hours in the Finishing Department during the year. 3. If Donovan's continues to use the plantwide overhead rate, how much manufacturing overhead would be allocated to Job 450 and Job 455 ? 4. If Donovan's uses departmental overhead rates, how much manufacturing overhead would be allocated to Job 450 and Job 455 ? 5. Based on your answers to Requirements 3 and 4 , does the plantwide overhead rate overcost or undercost either job? Explain. If Donovan's sells its furniture at 125% of cost, will its choice of allocation systems affect product pricing? Explain

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