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Textra Plastics produces parts for a variety of small machine manufacturers. Most products go through...

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Accounting

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 2017 follow.

Molding Trimming
Direct labor hours 51,000 DLH 50,000 DLH
Machine hours 33,500 MH 4,200 MH
Overhead costs $ 800,000 $ 600,000

Data for two special order parts to be manufactured by the company in 2017 follow.

Part A27C Part X82B
Number of units 10,000 units 54,000 units
Machine hours
Molding 5,300 MH 1,060 MH
Trimming 2,600 MH 650 MH
Direct labor hours
Molding 4,000 DLH 2,450 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.

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