Vulcan Molding has three production departments: A, B, and C. At the start of the year, the company estimated that it would incur $2,500,000 of direct labor cost and $8,000,000 of manufacturing overhead as follows:
![1001_259-B-M-A-J-O-C (920).png](https://secure.tutorsglobe.com/CMSImages/1001_259-B-M-A-J-O-C (920).png)
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.