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wnite company nas two departments, Cutting and Finishing ine company uses a job-oroer 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 labor-hours. At the beginning of the year, the company made the following estimates: Direct labor-hours Machine-hours Total fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labor-hour Department Cutting Finishing 7,700 90,000 68,100 3,500 $ 380,000 $ 502,000 $ 2.00 $ 13.75 Required: 1. Compute the predetermined overhead rate for each department 2. The job cost sheet for Job 203, which was started and completed during the year, showed the following: Department Cutting Finishing Direct labor-hours 6 12 Machine-hours 88 Direct materials 5800 $370 Direct labor cost $144 $288 6 203 Using the predetermined overhead rates that you computed in requirement (1), compute the total manufacturing cost assigned to Job 3. Would you expect substantially different amounts of overhead cost to be assigned to some jobs if the company used a plantwide bredetermined overhead rate based on direct labor-hours, rather than using departmental rates

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