Ayr Company manufactures plastic novelties used for advertising purposes. The manufacturing process involves three steps. In the Molding Department hot plastic is injected into a mold, cooled, and then ejected. This creates the basic product. The products are then moved to the Trimming Department where excess plastic (flash) is trimmed off the product and inspected for any faults. Any products found to be defective are recycled. The products are then moved to the Painting Department where they are painted with the customers message and logo. The following information was reported for the most recent period: DEPARTMENT Molding Trimming Painting Planned Manufacturing Overhead $1,656,000 $645,000 $854,000 Machine Hours Capacity (machine hours) 12,750 2,250 5,100 Direct Labours Capacity (direct labour hours) 5,500 9,200 9,700 REQUIRED A) Compute the plantwide manufacturing overheard rate assuming that Ayr Company uses direct labour hours capacity as the plant-wide cost driver and planned manufacturing overhead b) Compute the departmental manufacturing overhead rates assuming that Ayr Company uses planned manufacturing overhead and the capacity of the cost driver for each department. Ayr Company plans to use machine hours as the cost driver in the Molding Department and direct labour hours in the Trimming and Painting Department C) AYr Company recently completed a job for Maggie Company for which the following data was accumulated. Compute the cost of this job assuming Ayr Company uses the plant-wide rate you computed in a) above. Then compute the cost of this job assuming Ayr Company uses the departmental rates you computed in b) above. DEPARTMENT Molding Trimming Painting Direct Materials $750 $25 $43 Direct Labour Cost $175 $90 $120 Direct Labour Hours 5 2 3 Machine Hours 5 1 0

Department hot plastic is injected into a mold, cooled, and then ejected. This creates the basic product. The products are then moved to the Trimming Department where excess plastic (flash) is trimmed off the product and inspected for any faults. Any products found to be defective are recycled. The products are then moved to the Painting Department where they are painted with the customer's message and logo. The following information was reported for the most recent period: DEPARTMENT Molding Trimming Painting $1,656,000 $645,000 $854,000 Planned Manufacturing Overhead Machine Hours Capacity (machine hours) Direct Labours Capacity (direct labour hours) 12,750 2,250 5,100 5,500 9,200 9,700 REQUIRED A) Compute the plant-wide manufacturing overheard rate assuming that Ayr Company uses direct labour hours capacity as the plant-wide cost driver and planned manufacturing overhead b) Compute the departmental manufacturing overhead rates assuming that Ayr Company uses planned manufacturing overhead and the capacity of the cost driver for each department. Ayr Company plans to use machine hours as the cost driver in the Molding Department and direct labour hours in the Trimming and Painting Department C) AYr Company recently completed a job for Maggie Company for which the following data was accumulated. Compute the cost of this job assuming Ayr Company uses the plant-wide rate you computed in a) above. Then compute the cost of this job assuming Ayr Company uses the departmental rates you computed in b) above. DEPARTMENT Molding Trimming Painting Direct Materials $750 $25 $43 Direct Labour Cost $175 $90 $120 Direct Labour Hours 5 2 3 Machine Hours 5 1 0