The Roan plant of the Texas Company has two production departments: Extrusion and

Assembly. The plant produces two products: P and Q. Cost information for the production departments

is given below:

Extrusion $360,000

Assembly 750,000

The following table presents activity information about the departments and products:

Extrusion Assembly Total

Direct labor hours:

P 10,000 20,000 30,000

Q 10,000 30,000 40,000

Total 20,000 50,000 70,000

Machine hours:

P 5,000 1,000 6,000

Q 15,000 2,000 17,000

Total 20,000 3,000 23,000

Required:

a. Compute the predetermined overhead rate for each department if Extrusion uses machine hours and Assembly uses labor hours