Required: 1. Compute a departmental overhead rate for the Molding department based on machine hours and a departmental overhead rate for the Trimming department based on direct labor hours. 2. Determine the overhead cost per unit for each part using the departmental rates.
Required: 1. Compute a departmental overhead rate for the Molding department based on machine hours and a departmental overhead rate for the Trimming department based on direct labor hours. 2. Determine the overhead cost per unit for each part using the departmental rates.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Molding department...
![### Required information
*[The following information applies to the questions displayed below.]*
Textra produces parts for a machine manufacturer. Parts go through two departments, Molding and Trimming. The company budgets overhead cost of $243,750 in the Molding department and $203,750 in the Trimming department. The company budgets 16,000 machine hours (MH) in Molding and 25,000 direct labor hours (DLH) in Trimming. Actual production information follows.
| | Number of Units | Molding Department | Trimming Department |
|--------------------|-----------------|--------------------|---------------------|
| | | Hours per Unit | Total Hours | Hours per Unit | Total Hours |
| Part Z | 3,000 units | 2.0 MH per unit | 6,000 MH | 3 DLH per unit | 9,000 DLH |
| Part X | 4,000 units | 2.5 MH per unit | 10,000 MH | 4 DLH per unit | 16,000 DLH |
| **Totals** | | | 16,000 MH | | 25,000 DLH |
### Required:
1. Compute a departmental overhead rate for the Molding department based on machine hours and a departmental overhead rate for the Trimming department based on direct labor hours.
2. Determine the overhead cost per unit for each part using the departmental rates.
Complete this question by entering your answers in the tabs below.
**Required 1** | **Required 2**
**Compute a departmental overhead rate for the Molding department based on machine hours and a departmental overhead rate for the Trimming department based on direct labor hours.**
| Molding | | |
| -------- | ----- | ------ |
| | | |
| Trimming | | |
| -------- | ----- | ------ |
| | | |](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6f96dd47-ce3e-4fb6-9f29-e38e62f29b56%2F4bcc3605-19dd-407a-b42e-43b238e0bc41%2Fgf4kegs_processed.png&w=3840&q=75)
Transcribed Image Text:### Required information
*[The following information applies to the questions displayed below.]*
Textra produces parts for a machine manufacturer. Parts go through two departments, Molding and Trimming. The company budgets overhead cost of $243,750 in the Molding department and $203,750 in the Trimming department. The company budgets 16,000 machine hours (MH) in Molding and 25,000 direct labor hours (DLH) in Trimming. Actual production information follows.
| | Number of Units | Molding Department | Trimming Department |
|--------------------|-----------------|--------------------|---------------------|
| | | Hours per Unit | Total Hours | Hours per Unit | Total Hours |
| Part Z | 3,000 units | 2.0 MH per unit | 6,000 MH | 3 DLH per unit | 9,000 DLH |
| Part X | 4,000 units | 2.5 MH per unit | 10,000 MH | 4 DLH per unit | 16,000 DLH |
| **Totals** | | | 16,000 MH | | 25,000 DLH |
### Required:
1. Compute a departmental overhead rate for the Molding department based on machine hours and a departmental overhead rate for the Trimming department based on direct labor hours.
2. Determine the overhead cost per unit for each part using the departmental rates.
Complete this question by entering your answers in the tabs below.
**Required 1** | **Required 2**
**Compute a departmental overhead rate for the Molding department based on machine hours and a departmental overhead rate for the Trimming department based on direct labor hours.**
| Molding | | |
| -------- | ----- | ------ |
| | | |
| Trimming | | |
| -------- | ----- | ------ |
| | | |
![### Calculation of Overhead Cost per Unit
This section provides a guide for determining the overhead cost per unit for each part using departmental rates. Follow the given steps and use the provided tables to complete the calculations.
**Instructions:**
1. **Identify Departmental Overhead Rates**: Locate the relevant overhead rates for each department involved in the production process (e.g., Molding, Trimming).
2. **Determine Hours per Unit for Each Part**: Identify the time taken (in hours) for each part through different departments.
3. **Calculate Overhead Cost per Unit**: Use the provided formula to calculate the overhead cost per unit for each part.
**Formula:**
\[
\text{Overhead Cost per Unit} = \text{Departmental Overhead Rate} \times \text{Hours per Unit}
\]
**Note:** Round "Overhead rate" and "Hours per unit" to 2 decimal places.
#### Table for Part Z:
| Category | Departmental Overhead Rate | Hours per Unit | Overhead Cost per Unit |
|--------------|----------------------------|----------------|------------------------|
| **Molding** | | | $ 0.00 |
| **Trimming** | | | 0.00 |
| **Total** | | | |
#### Table for Part X:
| Category | Departmental Overhead Rate | Hours per Unit | Overhead Cost per Unit |
|--------------|----------------------------|----------------|------------------------|
| **Molding** | | | $ 0.00 |
| **Trimming** | | | 0.00 |
| **Total** | | | |
### Explanation of Tables:
1. **Part Z:**
- Two categories: Molding and Trimming for part Z.
- You need to fill in the departmental overhead rate and hours per unit for Molding and Trimming.
- Multiply the overhead rate by hours per unit to determine the overhead cost for each category.
- Sum the overhead costs to get the total overhead cost per unit for part Z.
2. **Part X:**
- Similarly, there are two categories: Molding and Trimming for part X.
- Fill in the relevant departmental rates and hours per unit.
- Compute the overhead cost per unit for each category and sum them for the total overhead cost for part](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6f96dd47-ce3e-4fb6-9f29-e38e62f29b56%2F4bcc3605-19dd-407a-b42e-43b238e0bc41%2Feye0d7d_processed.png&w=3840&q=75)
Transcribed Image Text:### Calculation of Overhead Cost per Unit
This section provides a guide for determining the overhead cost per unit for each part using departmental rates. Follow the given steps and use the provided tables to complete the calculations.
**Instructions:**
1. **Identify Departmental Overhead Rates**: Locate the relevant overhead rates for each department involved in the production process (e.g., Molding, Trimming).
2. **Determine Hours per Unit for Each Part**: Identify the time taken (in hours) for each part through different departments.
3. **Calculate Overhead Cost per Unit**: Use the provided formula to calculate the overhead cost per unit for each part.
**Formula:**
\[
\text{Overhead Cost per Unit} = \text{Departmental Overhead Rate} \times \text{Hours per Unit}
\]
**Note:** Round "Overhead rate" and "Hours per unit" to 2 decimal places.
#### Table for Part Z:
| Category | Departmental Overhead Rate | Hours per Unit | Overhead Cost per Unit |
|--------------|----------------------------|----------------|------------------------|
| **Molding** | | | $ 0.00 |
| **Trimming** | | | 0.00 |
| **Total** | | | |
#### Table for Part X:
| Category | Departmental Overhead Rate | Hours per Unit | Overhead Cost per Unit |
|--------------|----------------------------|----------------|------------------------|
| **Molding** | | | $ 0.00 |
| **Trimming** | | | 0.00 |
| **Total** | | | |
### Explanation of Tables:
1. **Part Z:**
- Two categories: Molding and Trimming for part Z.
- You need to fill in the departmental overhead rate and hours per unit for Molding and Trimming.
- Multiply the overhead rate by hours per unit to determine the overhead cost for each category.
- Sum the overhead costs to get the total overhead cost per unit for part Z.
2. **Part X:**
- Similarly, there are two categories: Molding and Trimming for part X.
- Fill in the relevant departmental rates and hours per unit.
- Compute the overhead cost per unit for each category and sum them for the total overhead cost for part
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