Problem
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 2015 follow.
|
Molding
|
Trimming
|
|
Direct labor hours
|
|
|
45,000
|
DLH
|
|
|
|
48,000
|
DLH
|
|
|
Machine hours
|
|
|
36,000
|
MH
|
|
|
|
4,200
|
MH
|
|
|
Overhead costs
|
|
$
|
740,000
|
|
|
|
$
|
600,000
|
|
|
Data for two special order parts to be manufactured by the company in 2015 follow:
|
Part A27C
|
Part X82B
|
|
Number of units
|
|
10,200
|
units
|
|
|
55,000
|
units
|
|
|
Machine hours
|
|
|
|
|
|
|
|
|
|
Molding
|
|
5,600
|
MH
|
|
|
1,120
|
MH
|
|
|
Trimming
|
|
3,000
|
MH
|
|
|
750
|
MH
|
|
|
Direct labor hours
|
|
|
|
|
|
|
|
|
|
Molding
|
|
3,500
|
DLH
|
|
|
2,550
|
DLH
|
|
|
Trimming
|
|
500
|
DLH
|
|
|
2,500
|
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.