Question

Abra Kebabra produces two types of frozen wraps (Mediterranean and Tzatziki).

Both types of frozen wraps pass through a moulding and a folding department. Budgeted data for the two departments are as follows:

	Moulding	Folding	Total
Overhead	$330,000	$236,000	$566,000
Maintenance Hours	15,000	5,000	20,000
Machine Hours	30,000	2,000	32,000
Direct Labour Hours	2,000	7,500	12,500

In the moulding department, the Mediterranean wrap requires 2.8 hours of machine time, while the Tzatziki wrap requires 2 hours of machine time.

In the folding department, the Mediterranean wrap requires 0.7 hours of direct labour, while the Tzatziki wrap requires 0.5 hours of direct labour.

Production of 5,000 Mediterranean wraps and 8,000 Tzatziki wraps is expected.

On top of the $566,000 of overhead budgeted, there are also $400,000 of estimated maintenance costs from the maintenance department, which services the moulding and folding divisions.

Before departmental overhead rates are calculated, maintenance costs are assigned to moulding and folding in proportion to maintenance hours incurred. Maintenance costs are added to the direct manufacturing overhead costs to form departmental overhead pools. A manufacturing overhead rate is then calculated for each department using machine hours for moulding and direct labour hours for folding.

Required. Complete the following tables. Do not use $ signs in your answer. Do not round any intermediary calculations.

	Moulding	Folding
Total Maintenance Costs	$	$

	Mediterranean	Tzatziki
Total Machine Hours	hours	hours
Total Direct Labour Hours	hours	hours
Total Overhead Costs	$	$

Answer 1

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