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 54,000 DLH 52,000 DLH Machine hours 38,500 MH 3,900 MH Overhead costs $ 730,000 $ 560,000 Data for two special order parts to be manufactured by the company in 2017 follow. Part A27C Part X82B Number of units 10,800 units 54,500 units Machine hours Molding 5,700 MH 1,140 MH Trimming 2,600 MH 650 MH Direct labor hours Molding 5,000 DLH 2,350 DLH Trimming 700 DLH 3,500 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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