Rio Valde Co. uses a normal cost, job order costing system. In the Mixing Department, overhead is applied using machine hours; in Paving, overhead is applied using direct labor hours. In December 2009, the company estimated the following data for its two departments for 2010:

a. Compute the predetermined OH rate for each department of Rio Valde.
b. Job #220 was started and completed during March 2010. The job cost sheet shows the following information:

Compute the overhead applied to Job #220 for each department and in total.
c. The president of Rio Valde suggested that, for simplicity, a single predetermined overhead rate be computed using machine hours. How much overhead would have been applied to Job #220 if that single rate had been used? Would such a rate have indicated the actual overhead cost of each job?Explain.

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Direct labor hours Machine hours Budgeted overhead cost. Mixing Department 12,000 60,000 480,000 Paving Department 28,000 12,000 $700,000 Mixing Department Direct material Direct labor cost Direct labor hours Machine hours $22,600 $1,250 24 290 Paving Department $3,400 $4,050 340