Upon review of the Company's operations you find that it has two departments, assembly and machine shop.  Analyzing the overhead accounts, you find the following situation:  

Department            Projected Overhead Costs                 Projected Direct Labor

Assembly                $1,800,000                                         165,000

Machine Shop         $2,000,000                                          50,000

1. If a department rate were used, what amount of overhead would be allocated to the proposed contract ________________?  Plant-wide rate____________?

2. What rate should the buyer use?  Plant-wide rate  _____________   Department rate_______________

3. Would there be any limitations on using either rate?