Fyfe Co. manufactures plastic novelties used for advertising purposes. The process involves three steps. In the moulding department, hot plastic is injected into a mould, 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 and the product is inspected for 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 Moulding Trimming Painting Planned manufacturing overhead $1,656,000 $645,000 $854,000 Actual manufacturing overhead $1,687,000 $664,000 $822,000 Average machine hours 12,000 2,100 4,500 Actual machine hours 12,750 2,250 4, 100 Average direct labour hours 5,400 8,750 9,000 Actual direct labour hours 5,500 9,200 8,700