The Roan plant of the Texas Company has two production departments: Extrusion

The Roan plant of the Texas Company has two production departments: Extrusion and

Assembly. The plant produces two products: P and Q. Cost information for the production departments

is given below:

Extrusion $360000

Assembly 750000

The following table presents activity information about the departments and products:

Extrusion Assembly Total

Direct labor hours:

P 10000 20000 30000

Q 10000 30000 40000

Total 20000 50000 70000

Machine hours:

P 5000 1000 6000

Q 15000 2000 17000

Total 20000 3000 23000

Required:

a. Compute the predetermined overhead rate for each department if Extrusion uses machine hours and Assembly uses labor hours