Question

Blue Fan International manufactures various parts for small machine manufacturers. These parts go through the molding and trimning processes before they are packaged. Expected costs and activities for the molding department and for the trimming department for this year follow. (Round "OH rate and cost per unit" answers to 2 decimal places.) Direct labor hours Machine hours Overhead costs Molding Trimming 52.000 DLH 48,000 DLH 39,500 MH3 ,600 MH $756,000 5616,000 Data for two special-order parts to be manufactured by the company in this year follow. Part A27C 9.800 units Part XB2B 54,500 units Number of units Machine hours Molding Trimning Direct labor hours Molding Timing LÊà MH 2,600 MH 1920 PH 650 MH 5,500 DLH 700 DLH3 2.150 DLH .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. Molding 2. & 3. Determine the total overhead cost assigned to each product line using the departmental overhead rates from requirement 1. and then determine the overhead cost per unit. Activity Driver Departmental Total Overhead Cost Part A27C < Prey 17 of 18 !!! Next >

Answer 1

Departmental Overhead rate = Overheads/Driver
Molding	=756000/30500	24.7869	per MH
Trimming	=616000/48000	12.8333	Per DLH
Part A27C	Driver	Rate	Cost
Molding	5,100.00	24.79	126,413.11
Trimming	700.00	12.83	8,983.33
		Total overheads	135,396.45
		Number of units	9,800.00
		Overhead per unit	13.82
Part X82B	Driver	Rate	Cost
Molding	1,020.00	24.79	25,282.62
Trimming	3,500.00	12.83	44,916.67
		Total overheads	70,199.29
		Number of units	54,500.00
		Overhead per unit	1.29

1 Departmental Overhead rate = Overheads/Driver 2 Molding 3 Trimming =756000/30500 =756000/30500 =616000/48000 5616000/48000 per MH Per DLH 5 Part A27C 6 Molding 7 Trimming Driver 5100 700 Rate Cost =C2 =B6*C6 =C3 =B7*C7 Total overheads =SUM(D6:D7) Number of units 9800 Overhead per unit =D8/D9 8 10 11 12 Part X82B 13 Molding 14 Trimming Driver 1020 3500 =C3 Rate Cost =C2 =B13*C13 =B14*C14 Total overheads =SUM(D13:014) Number of units 54500 Overhead per unit =D15/D16 15 16 17