Exercise 3-15 Departmental Overhead Rates [LO1, LO2, LO3] Diewold Company has two departments, Milling and Assembly. The company uses a job-order costing system and computes a predetermined overhead rate in each department. The Milling Department bases its rate on machine-hours, and the Assembly Department bases its rate on direct labor-hours. At the beginning of the year, the company made the following estimates: Department Milling Assembly Direct labor-hours 8,400 80,000 Machine-hours 65,000 2,500 Total fixed manufacturing overhead cost $ 360,000 $ 458,000 Variable manufacturing overhead per machine-hour $ 4.00 – Variable manufacturing overhead per direct labor-hour – $ 2.75 Required: 1. Compute the predetermined overhead rate to be used in each department. (Round your answers to 2 decimal places. Omit the “$” sign in your response.) Department Milling Assembly Predetermined overhead rate $ per MH $ per DLH 2. Assume that the overhead rates you computed in (1) above are in effect. The job cost sheet for Job 407, which was started and completed during the year, showed the following: Department Milling Assembly Direct labor-hours 6 18 Machine-hours 83 4 Materials requisitioned $ 770 $ 360 Direct labor cost $ 37 $ 180 Compute the total manufacturing cost assigned to Job 407. (Round your intermediate and final answers to 2 decimal places. Omit the “$” sign in your response.) Total manufacturing cost $ 3. Would you expect substantially different amounts of overhead cost to be charged to some jobs if the company used a plantwide overhead rate based on direct labor-hours instead of using departmental rates? No Yes