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Trimming Direct labor hours Machinee hours Overhead costs Molding 52,000 DLH 48,000 DLH 30,500 MH 3,600 MH $730,000 $590,000 Data for two special order parts to be manufactured by the company in 2017 follow: Part A27C Part X82B Number of units Machine hours 9,800 units 54,500 units Molding Trimming Direct labor 5,100 MH 2,600 MH 1,020 MH 650 MH hours Molding Trimming 5,500 DLH 700 DLH 2,150 DLH 3,500 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 Trimming 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 DepartmentaTotal Overhead Driver OH Rate Part A27C Cost Molding Trimming Activity DepartmentaTotal Overhead Driver OH Rate Part X82B Cost Molding Trimmin
Expert Answer
1. Molding
Overhead costs $730,000 $23.93 per machine hour
Machine hours 30,500
Trimming
Overhead costs $590,000 $12.29 per direct labor hour
Direct labor hours 48,000
2. Part A276 Activity driver Departmental overhead cost Total overhead cost
Molding 5100 MH $23.93 122043
Trimming 700 Labour hours $12.29 8603
Part X82B Activity driver Departmental overhead cost Total overhead cost
Molding 1020 MH $23.93 24408.6
Trimming 3500 LB $12.29 43015
3. Part A276 Part X82B
No.of units 9800 units 54500
total overhead cost 130646 67423.6
(122043 + 8603) (24408.6 + 43015)
overhead cost per unit $13.33 $1.23
