Vulcan Molding has three production departments: A, B, and C. At the start of the year, the company estimated that it would incur $3,080,000 of direct labor cost and $10,000,000 of manufacturing overhead as follows:

Along with many others, Vulcan Molding worked on the following three jobs during the year:

Required
a. Calculate the overhead that would be assigned to each job assuming the company uses one plant-wide overhead allocation rate based on expected labor cost.
b. Calculate the overhead that would be assigned to each job assuming the company uses a separate overhead allocation rate for each production department based on direct labor cost.
c. Which is preferable: a single overhead rate or separate rates by production department? Explain.

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Dept. A Dept. B Dept. C Total Estimated Overhead Estimated Direct Labor Overhead Rate $4,000,000 $3,000,000 $3,000,000 $10,000,000 $3,080,000 $3.25 $ 630,000 $1,250,000 $2.40 $1,200,000 $3.33 $4.76 Direct Labor Cost Dept. A Dept. B Dept. C Total Job 201 Job 202 Job 203 $9,500 $5,000 $2,000 $3,000 $6,500 $5,000 $4,500 $9,000 $2,000 $17,000 $20,500 $ 9,000