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Farmer's Fine Fumblings manulachures upcale custom fumilure. Farmer's currenty uses a plantwide overhead rate based on drect labor bours to alocate its 51,450 , b00 of elanufactuing oneri individual jobs. However, Deana Johnson, awner and CEO, h considering refing the company's costing system by using departmental evechead rates Curtenty, the Machiking Departmert incu $730,000 of manulacturing overhead while the Finishing Department incurs $720. 000 of manulacturing ovethead Johnson has idectifiod machine hours (MH) as the primary inanufactaring avert cost driver in the Machining Department and diect labor (DC) hours as the primary cost divet in the Finikhing Department (i. (Click the icon to view the job informasion) Read the requirements Requirement 1. Compute the plantwide overbead rate assuming that Farmer's expects to incur 25,000 foul DL hours during the year First identify the formula, then compute the rate. (Round your answer to the nearest whole dollar) More info The Farmer'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 hour occurred in the Machining Department). Job 455 incurred 7MH in the Machining Department and 3DL hours in the Finishing Department (the other two DL hours occurred in the Machining Department). Requirements 1. Compute the plantwide overhead rate assuming that Famer's expects to incur 25,000 total DL hours during the year. 2. Compute departmental overhead rates assuming that Farmer's expects to incur 14,600MH in the Machining Department and 16,000 DL hours in the Finishing Department during the year. 3. If Farmer's continues to use the plantwide overhead rate, how much manufacturing overhead would be allocated to Job 450 and Job 455 ? 4. If Farmer'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 Farmer's sells its furniture at 125% of cost, will its choice of allocation systems affect product pricing? Explain

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