Refer to the information in Exercise 4-4. In Exercise 4-4 Textra Plastics produces parts for a variety

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Refer to the information in Exercise 4-4.
In Exercise 4-4
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 . . . . . . . . . . . . . . . . 52,000 DLH ............ 48,000 DLH
Machine hours . . . . . . . . . . . . . . . . . . . 30,500 MH ................ 3,600 MH
Overhead costs . . . . . . . . . . . . . . . . . . . . $730,000 ................. $590,000
Data for two special order parts to be manufactured by the company in 2015 follow:
________________________________Part A27C..................Part X82B
Number of units . . . . . . . . . . . . . . . . . . 9,800 units ................ 54,500 units
Machine hours
Molding . . . . . . . . . . . . . . . . . . . . . . . . 5,100 MH ................... 1,020 MH
Trimming . . . . . . . . . . . . . . . . . . . . . . . 2,600 MH ..................... 650 MH
Direct labor hours
Molding . . . . . . . . . . . . . . . . . . . . . . . 5,500 DLH ................. 2,150 DLH
Trimming . . . . . . . . . . . . . . . . . . . . . . 700 DLH ................... 3,500 DLH
Required
1. Compute a departmental overhead rate for the molding department based on machine hours and a department overhead rate for the trimming department based on direct labor hours.
2. Determine the total overhead cost assigned to each product line using the departmental overhead rates from requirement 2.
3. Determine the overhead cost per unit for each product line using the departmental rate.
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Managerial Accounting

ISBN: 978-0078025600

5th edition

Authors: John Wild, Ken Shaw

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