Question
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
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 2017 follow.
Molding Trimming
Direct labor hours 53,000 DLH 54,000 DLH
Machine hours 38,500 MH 4,800 MH
Overhead costs $ 740,000 $ 610,000
Data for two special order parts to be manufactured by the company in 2017 follow.
Part A27C Part X82B
Number of units 10,000 units 52,000 units
Machine hours
Molding 6,100 MH 1,220 MH
Trimming 4,400 MH 1,100 MH
Direct labor hours
Molding 5,500 DLH 3,200 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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