Fine Furnishings manufactures upscale custom furniture. currently uses a plantwide overhead rate based on direct labor hours to allocate its of manufacturing overhead to individual jobs. However, , owner and CEO, is considering refining the company's costing system by using departmental overhead rates. Currently, the Machining Department incurs of manufacturing overhead while the Finishing Department incurs of manufacturing overhead. has identified machine hours (MH) as the primary manufacturing overhead cost driver in the Machining Department and direct labor (DL) hours as the primary cost driver in the Finishing Department.
Required:
Compute the plantwide overhead rate assuming that Farmers expects to incur 30,000 total.