Question

TACT Ovementowo ProC. TOWEVESTICIS CONSIG rate method. The following factory overhead was budgeted for Pineapple: T IG Assembly Department Testing Department Total $155,400 599,400 $754,800 Direct machine hours were estimated as follows: 3,700 hours Assembly Department Testing Department 7,400 Total 11,100 hours In addition, the direct machine hours (dmh) used to produce a unit of each product in each department were determined from engineering records, as follows: Commercial 0.50 dmh Residential 1.00 dmh Assembly Department Testing Department 1.00 2.00 Total machine hours per unit 1.50 dmh 3.00 dmh a. Determine the per-unit factory overhead allocated to the Commercial and Residential motors under the single plantwide factory overhead rate method, using direct machine hours as the allocation base. Commercial Motor $ per unit Residential Motor $ 42 per unit b. Determine the per-unit factory overhead allocated to the Commercial and Residential motors under the multiple production

Answer 1

Answer -

Here,

Single plant wide factory overhead rate = Budgeted factory overhead / Estimated direct machine hours

And

Factory overhead cost per unit = Single plant wide factory overhead rate * Direct machine hours used to produce a unit

a. Answer -

Per-unit factory overhead allocated to the commercial motors

	Assembly department	Testing department	Total
Budgeted factory overhead (A)	$155400	$599400	$754800
Estimated direct machine hours (B)	3700 hours	7400 hours	11100 hours
Single plant wide factory overhead rate (C) = (A/B)	$42	$81	$68
Direct machine hours used to produce a unit (D)	0.5 dmh	1.00 dmh	1.50 dmh
Factory overhead cost per unit (E) = (C * D)	$21	$81	$102

So,

Per-unit factory overhead allocated to the commercial motors = $102

Per-unit factory overhead allocated to the residential motors

	Assembly department	Testing department	Total
Budgeted factory overhead (A)	$155400	$599400	$754800
Estimated direct machine hours (B)	3700 hours	7400 hours	11100 hours
Single plant wide factory overhead rate (C) = (A/B)	$42	$81	$68
Direct machine hours used to produce a unit of each production (D)	1.00 dmh	2.00 dmh	3.00 dmh
Factory overhead cost per unit (E) = (C * D)	$42	$162	$204

So,

Per-unit factory overhead allocated to the residential motors = $204