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Let's work through the questions presented in the image. Here's how we'll solve each requirement:

### 1. Compute the predetermined overhead rate for each department.

**Cutting Department:**
- Bases overhead rate on machine-hours.
- Given:
  - Total fixed manufacturing overhead cost: \$264,000
  - Variable manufacturing overhead per machine-hour: \$2.00
  - Estimated machine-hours: 48,000

Predetermined overhead rate (Cutting) = (Total fixed overhead + (Variable rate × Machine-hours)) / Machine-hours

\[
\text{Predetermined overhead rate (Cutting)} = \frac{264,000 + (2 \times 48,000)}{48,000}
\]

\[
\text{Predetermined overhead rate (Cutting)} = \frac{264,000 + 96,000}{48,000} = \frac{360,000}{48,000} = 7.50 \text{ per machine-hour}
\]

**Finishing Department:**
- Bases overhead rate on direct labor-hours.
- Given:
  - Total fixed manufacturing overhead cost: \$366,000
  - Variable manufacturing overhead per direct labor-hour: \$4.00
  - Estimated direct labor-hours: 30,000

Predetermined overhead rate (Finishing) = (Total fixed overhead + (Variable rate × Direct labor-hours)) / Direct labor-hours

\[
\text{Predetermined overhead rate (Finishing)} = \frac{366,000 + (4 \times 30,000)}{30,000}
\]

\[
\text{Predetermined overhead rate (Finishing)} = \frac{366,000 + 120,000}{30,000} = \frac{486,000}{30,000} = 16.20 \text{ per direct labor-hour}
\]

### 2. Compute the total manufacturing cost assigned to Job 203 using the predetermined overhead rates.

**Cutting Department:**
- Direct labor-hours = 6
- Machine-hours = 80
- Direct materials = \$500
- Direct labor cost = \$108

Overhead cost (Cutting) = Predetermined rate (Cutting) × Machine-hours

\[
\text{Overhead cost (Cutting)} = 7.50 \times 80 = 600
\]

Total cost (Cutting) = Direct materials + Direct labor cost + Overhead cost

\[
\text{Total cost (Cutting)} = 500 + 108 + 600 = 1208
\]

**Finishing Department:**
- Direct labor-hours = 20
- Machine-hours = 4
- Direct materials = \$310
- Direct labor cost = \$360

Overhead cost (Finishing) = Predetermined rate (Finishing) × Direct labor-hours

\[
\text{Overhead cost (Finishing)} = 16.20 \times 20 = 324
\]

Total cost (Finishing) = Direct materials + Direct labor cost + Overhead cost

\[
\text{Total cost (Finishing)} = 310 + 360 + 324 = 994
\]

**Total manufacturing cost for Job 203:**

\[
\text{Total cost for Job 203} = 1208 + 994 = 2202
\]

### 3. Would using a plantwide predetermined overhead rate based on direct labor-hours result in substantially different overhead costs?

To determine this, we would calculate the plantwide rate by combining the overheads and applying it based on total direct labor-hours. The potential differences would depend on the proportion of machine-hours to labor-hours in each department, leading to significant variances in cost allocation.

**Would you like more details on this calculation or to explore it further?**

### Additional Related Questions:
1. How do variable and fixed costs impact the calculation of predetermined overhead rates?
2. What are the implications of using departmental vs. plantwide overhead rates?
3. How would changes in estimated machine-hours or labor-hours affect the predetermined rates?
4. How do different costing methods affect job order costing and overhead allocation?
5. What are the advantages and disadvantages of using machine-hours vs. direct labor-hours for overhead rates?

**Tip:** Always ensure your estimated hours and cost inputs are accurate to maintain reliable predetermined overhead rates!

White Company has two departments, Cutting and Finishing. The company uses job-order costing and computes a predetermined overhead rate in each department. The Cutting Department bases its rate on machine-hours, and the Finishing Department bases its rate on direct labor-hours. Compute the predetermined overhead rate for each department. Also, compute the total manufacturing cost for Job 203.

Learn how to compute the predetermined overhead rates for the Cutting and Finishing departments of White Company. This example includes step-by-step calculations for job-order costing, as well as determining the total manufacturing cost for Job 203 using departmental rates based on machine-hours and direct labor-hours.

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