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A company produces parts for a variety of small machine manufacturers. Most products go through two operations, molding and trimming, before they are ready
A company produces parts for a variety of small machine manufacturers. Most products go through two operations, molding and trimming, before they are ready for packaging. Expected costs and activities for the molding department and for the trimming department for this year follow. Direct labor hours Machine hours Overhead costs 36,500 MH $720,000 Molding 44,000 DLH Trimming 48,000 DLH 4,800 MH $590,000 Data for two special-order parts to be manufactured by the company in this year follow. Number of units Part A27C 10,800 units Part X82B 53,500 units Machine hours Molding 6,000 MH 1,200 MH Trimming 4,600 MH 1,150 MH Direct labor hours Molding Trimming 5,000 DLH 2,500 DLH 1,100 DLH 5,500 DLH Required: 1. Compute the plantwide overhead rate using direct labor hours as the base. 2. Determine the overhead cost assigned to each product line using the plantwide rate computed in requirement 1.
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