Fab Furniture has two manufacturing departments--Cutting and Finishing. It considers all of its manufacturing overhead costs...

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Fab Furniture has two manufacturing departments--Cutting andFinishing. It considers all of its manufacturing overhead costs tobe fixed costs. The overhead estimates for the year and for one job(Order #75675) completed during the year are shown below.
Estimated Data Cutting Finishing Total
Manufacturing overhead costs $ 6,210,000 $ 6,750,000 $ 12,960,000
Direct labor-hours 135,000 81,000 216,000
Machine-hours 54,000 270,000 324,000
Order # 75675 Cutting Finishing Total
Direct labor-hours 28 20 48
Machine-hours 20 23 43
Required:
1. Calculate the predetermined overhead rate and the amount ofmanufacturing overhead applied to Order #75675 assuming FabFurniture uses a plantwide predetermined overhead rate based ondirect labor hours.
2. Fab Furniture is considering using departmental predeterminedoverhead rates with direct labor-hours as the allocation base inCutting and machine-hours as the allocation base in Finishing.Calculate the predetermined overhead rate for each department andthe manufacturing overhead applied to Order #75675 usingdepartmental rates.
(Round your intermediate calculation to 2 decimalplaces.)
3. Do you recommend that Fab Furniture use a plantwide overheadrate or departmental overhead rates? Why?

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Fab Furniture has two manufacturing departments--Cutting andFinishing. It considers all of its manufacturing overhead costs tobe fixed costs. The overhead estimates for the year and for one job(Order #75675) completed during the year are shown below.Estimated DataCuttingFinishingTotalManufacturing overhead costs$6,210,000$6,750,000$12,960,000Direct labor-hours135,00081,000216,000Machine-hours54,000270,000324,000Order # 75675CuttingFinishingTotalDirect labor-hours282048Machine-hours202343Required:1. Calculate the predetermined overhead rate and the amount ofmanufacturing overhead applied to Order #75675 assuming FabFurniture uses a plantwide predetermined overhead rate based ondirect labor hours.2. Fab Furniture is considering using departmental predeterminedoverhead rates with direct labor-hours as the allocation base inCutting and machine-hours as the allocation base in Finishing.Calculate the predetermined overhead rate for each department andthe manufacturing overhead applied to Order #75675 usingdepartmental rates.(Round your intermediate calculation to 2 decimalplaces.)3. Do you recommend that Fab Furniture use a plantwide overheadrate or departmental overhead rates? Why?

Estimated Data	Cutting		Finishing		Total
Manufacturing overhead costs	$	6,210,000	$	6,750,000	$	12,960,000
Direct labor-hours		135,000		81,000		216,000
Machine-hours		54,000		270,000		324,000

Order # 75675	Cutting	Finishing	Total
Direct labor-hours	28	20	48
Machine-hours	20	23	43