White Company has two departments, Cutting and Finishing. The company uses job-order costing 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 Direct materials Direct labor cost Cutting Direct labor-hours Machine-hours Total fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labor-hour 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 4 86 $ 790 $ 84 Finishing 12 $360 $ 252 Department Cutting 7,000 67,000 $ 370,000 $ 4.00 Required 1 Required 2 Required 3 Compute the predetermined overhead rate for each department. Note: Round your answers to 2 decimal places. Finishing 74,000 2,200 $ 480,000 Complete this question by entering your answers in the tabs given below. Using the predetermined overhead rates you computed in requirement (1), compute the total manufacturing cost assigned to Job 203. 0 $3.75 3. Would you expect substantially different amounts of overhead cost to be assigned to some jobs if the company used a plantwide predetermined overhead rate based on direct labor-hours, rather than using departmental rates?

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyz…