Question

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 this year follow. (Round "OH rate and cost per unit" answers to 2 decimal places.) Direct labor hours Machine hours Overhead costs Molding 52,000 DLH 30,500 MH $734,000 Trimming 48,000 DLH 3,600 MH $ 594,000 Data for two special-order parts to be manufactured by the company in this year follow: Part A27C 9,800 units Part X82B 54,500 units Number of units Machine hours Molding Trimming Direct labor hours Molding Trimming 5,100 MH 2,600 MH 1,020 MH 650 MH 5,500 DLH 700 DLH 2,150 DLH 3,500 DLH

Answer 1

1.

Molding
Overhead cost	$ 7,34,000.00	$                   24.07	per machine hour
Machine Hours	$     30,500.00
Trimming
Overhead cost	$ 5,94,000.00	$                   12.38	per diret labor hour
Direct Labour Hours	$     48,000.00

2 &3

Part A27C	Activity Driver	Departmental OH	Total Overhead Cost
Molding	5100	$                   24.07	$     1,22,757.00
Trimming	700	$                   12.38	$           8,666.00
Total Overhead Cost			$     1,31,423.00
Total Units			9800 units
Overhead cost per unit			$                 13.41
Part X828	Activity Driver	Departmental OH	Total Overhead Cost
Molding	1020	$                   24.07	$        24,551.40
Trimming	3500	$                   12.38	$        43,330.00
Total Overhead Cost			$        67,881.40
Total Units			54500 units
Overhead cost per unit			$                   1.25