Question

Laval produces lamps and home lighting fixtures. Its most popular product is a brushed aluminum desk lamp. This lamp is made from components shaped in the fabricating department and assembled in the assembly department. Information related to the 36.000 desk lamps produced annually follows. $260,000 Direct materials Direct labor Fabricating department (6,500 DLH * $20 per DLH) Assembly department (15,600 DLH ~ $26 per DLH) Machine hours Fabricating department Assembly department $130,000 $405,600 14,700 MH 21,250 MH Expected overhead cost and related data for the two production departments follow. Direct labor hours Machine hours Overhead cost Fabricating Assembly 170,000 DLH 295,000 DLH 157,000 MH 125,000 MH $330,000 $415,000 Required 1. Determine the plantwide overhead rate for Laval using direct labor hours as a base. 2. Determine the total manufacturing cost per unit for the aluminum desk lamp using the plantwide overhead rate. 3. Compute departmental overhead rates based on machine hours in the fabricating department and direct labor hours in the assembly department. 4. Use departmental overhead rates from requirement 3 to determine the total manufacturing cost per unit for the aluminum desk lamps.

Answer 1

Required 1
	Estimated overhead costs			745000	1.60	per direct labor hour
	Estimated direct labor hours			465000
Required 2
	Direct Materials				260,000
	Direct labor-Fabricating				130,000
	Direct labor-Assembly				405,600
	overhead				35360
	Total manufacturing costs				830,960
	Units produced				36,000
	Manufacturing cost per unit				23.08
Required 3			Departmental oh rate
	Fabricating		2.10	MH
	Assembly		1.41	DLH
Required 4
	Direct materials				260,000
	Direct labor
	Fabricating			130,000
	Assembly			405,600
					535,600
	overhead
	Fabricating			30898
	Assembly			21946
					52844
					848,444
	units produced				36,000
	manufacturing cost per unit				23.57	per unit