Textra produces parts for a machine manufacturer. Parts go through two departments, Molding and Trimming. The company budgets overhead cost of $261,250 in the Molding department and $221,250 in the Trimming department. The company budgets 16,000 machine hours (MH) in Molding and 25,000 direct labor hours (DLH) in Trimming. Actual production information follows.

Number of Units Molding Department Trimming Department

Hours per Unit Total Hours Hours per Unit Total Hours

Part Z 3,000 2.0MH per unit 6,000MH 3DLH per unit 9,000DLH

Part X 4,000 2.5MH per unit 10,000MH 4DLH per unit 16,000DLH

Totals 16,000MH 25,000DLH

Required:

1.Compute the plantwide overhead rate using direct labor hours as the allocation base.

2.Determine the overhead cost per unit for each part using the plantwide rate.