Gerbig Snacks makes potato chips, corn chips, and cheese puffs using three different production lines within the same manufacturing plant. Currently, Gerbig uses a single plantwide overhead rate to allocate its $3,762,000 of annual manufacturing overhead. Of this amount, $2,147,000 is associated with the potato chip line, $959,000 is associated with the corn chip line, and $656,000 is associated with the cheese puff line. Gerbig's plant is currently running a total of 17,100 machine hours: 11,300 in the potato chip line, 2,600 in the corn chip line, and 3,200 in the cheese puff line. Gerbig considers machine hours to be the cost driver of manufacturing overhead costs.
1. What is Gerbig's plantwide overhead rate?
2. Calculate the departmental overhead rates for Gerbig's three production lines. Round all answers to the nearest cent.
3. Which products have been overcosted by the plantwide rate? Which products have been undercosted by the plantwide rate?