Textra produces parts for a machine manufacturer. Parts go through two departments, Molding and Trimming. The company budgets overhead cost of $262,500 in the Molding department and $222,500 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. Part Z Part X Totals Number of Units 3,000 4,000 Molding Department Hours per Unit 2.0 MH per unit 2.5 MH per unit Total Hours 6,000 MH 10,000 MH 16,000 MH Trimming Department Hours per Unit 3 DLH per unit 4 DLH per unit Total Hours 9,000 DLH 16,000 DLH 25,000 DLH 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.
Textra produces parts for a machine manufacturer. Parts go through two departments, Molding and Trimming. The company budgets overhead cost of $262,500 in the Molding department and $222,500 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. Part Z Part X Totals Number of Units 3,000 4,000 Molding Department Hours per Unit 2.0 MH per unit 2.5 MH per unit Total Hours 6,000 MH 10,000 MH 16,000 MH Trimming Department Hours per Unit 3 DLH per unit 4 DLH per unit Total Hours 9,000 DLH 16,000 DLH 25,000 DLH 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.
Chapter1: Financial Statements And Business Decisions
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
Transcribed Image Text:Textra produces parts for a machine manufacturer. Parts go through two departments, Molding and Trimming. The
company budgets overhead cost of $262,500 in the Molding department and $222,500 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.
Part Z
Part X
Totals
Number of
Units
3,000
4,000
Molding Department
Hours per Unit
2.0 MH per unit
2.5 MH per unit
Total Hours
6,000 MH
10,000 MH
16,000 MH
Trimming Department
Hours per Unit
3 DLH per unit
4 DLH per unit
Total Hours
9,000 DLH
16,000 DLH
25,000 DLH
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.
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