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Textra Plastics produces parts for a variety of small machine manufacturers. Most products go through two operations, molding and trimming, before they are ready
Textra Plastics 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 Molding 54,000 DLH Machine hours Overhead costs 32,500 MH $740,000 Trimming 50,000 DLH 3,600 MH $540,000 Data for two special-order parts to be manufactured by the company in this year follow. Number of units Part A270 10,600 units Part X828 53,000 units Machine hours Molding 5,500 M Trimming 4,400 MH 1,100 MH 1,100 Direct labor hours: Molding 4,500 DLH 3,500 DLH Trimming 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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