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Textra produces parts for a machine manufacturer. Parts go through two departments, Molding and Trimming. The company budgets overhead cost of $240,000 in the Molding
Textra produces parts for a machine manufacturer. Parts go through two departments, Molding and Trimming. The company budgets overhead cost of $240,000 in the Molding department and $200,000 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.
Required:
- Compute the plantwide overhead rate using direct labor hours as the allocation base.
- Determine the overhead cost per unit for each part using the plantwide rate.
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