Question

Multiple Production Department Factory Overhead Rates

The total factory overhead for Bardot Marine Company is budgeted for the year at $495,000, divided into two departments: Fabrication, $382,500, and Assembly, $112,500. Bardot Marine manufactures two types of boats: speedboats and bass boats. The speedboats require four direct labor hours in Fabrication and three direct labor hours in Assembly. The bass boats require two direct labor hours in Fabrication and two direct labor hours in Assembly. Each product is budgeted for 3,000 units of production for the year.

If required, round all per unit answers to the nearest cent.

a. Determine the total number of budgeted direct labor hours for the year in each department.

Fabrication	direct labor hours
Assembly	direct labor hours

b. Determine the departmental factory overhead rates for both departments.

Fabrication	$ per dlh
Assembly	$ per dlh

c. Determine the factory overhead allocated per unit for each product using the department factory overhead allocation rates.

Speedboat:	$ per unit
Bass boat:	$ per unit

Answer 1

a. Determine the total number of budgeted direct labor hours for the year in each department.
Fabrication
speedboats	(3000 units *4 hours)		12000
bass boats	(3000 units *2 hours )		6000
Total			18000
Assembly
speedboats	(3000 units *3 hours)		9000
bass boats	(3000 units *2 hours )		6000
Total			15000
b. Determine the departmental factory overhead rates for both departments.
Fabrication	=382,500/18000		$    21.25	Per hour
Assembly	=112,500/15000		$       7.50	Per hour
c. Determine the factory overhead allocated per unit for each product using the department factory overhead allocation rates.
speedboats	= (4 hours *$21.25) + (3 hours *$7.50)				$ 107.50
bass boats	=(2 hours *$21.25) + (2 hours *$7.50)				$    57.50