Question
Textra produces parts for a machine manufacturer. Parts go through two departments, Molding and Trimming. The company budgets overhead cost of $243,750 in the Molding
Textra produces parts for a machine manufacturer. Parts go through two departments, Molding and Trimming. The company budgets overhead cost of $243,750 in the Molding department and $203,750 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 2.0 MH per unit 6,000 MH 3 DLH per unit 9,000 DLH Part X 4,000 2.5 MH per unit 10,000 MH 4 DLH per unit 16,000 DLH Totals 16,000 MH 25,000 DLH 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
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