FINANCE

Managerial Accounting 1B

Financial and Managerial Accounting

Chapter 17

 

Exercise 17-6 Plantwide overhead rate L.O. P1

[The following information applies to the questions displayed below.]

Textra Polymers 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 2011 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 2011 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

 

 

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