Question

1. Single Plantwide Factory Overhead Rate

   Bach Instruments Inc. makes three musical instruments: flutes, clarinets, and oboes. The budgeted factory overhead cost is $2,948,125. Overhead is allocated to the three products on the basis of direct labor hours. The products have the following budgeted production volume and direct labor hours per unit:

   	Budgeted Production Volume		Direct Labor Hours Per Unit
   Flutes	2,000	units	2.0
   Clarinets	1,500		3.0
   Oboes	1,750		1.5

   a. Determine the single plantwide overhead rate.
   $ per direct labor hour

   b. Use the overhead rate in (a) to determine the amount of total and per-unit overhead allocated to each of the three products, rounded to the nearest dollar.

   	Total Factory Overhead Cost	Per Unit Factory Overhead Cost
   Flutes	$	$
   Clarinets
   Oboes
   Total	$

Answer 1

	Budgeted Production Volumes	Direct Labor Hours	Total Direct Labor Hours
Flutes	2,000	2.00	4,000
Clarinets	1,500	3.00	4,500
Oboes	1,750	1.50	2,625
			11,125
A
	Total Factory OH	29,48,125	a
	Total Direct Labor Hours	11,125	b
	Plantwide OH Rate	265.00	a/b
B
	Total Factory OH Cost	Per Unit Factory OH Cost
Flutes(4000*265)	10,60,000	530.00
Clarinets(4500*265)	11,92,500	795.00
Oboes(2625*265)	6,95,625	397.50
Total	29,48,125