Question

Single plantwide factory overhead rate Bach Instruments Inc. makes three musical instruments: flutes, clarinets, and oboes. The budgeted factory overhead cost is $112,200. 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 2,600 units 0.4 900 1.4 Clarinets Oboes 1,000 1.0 If required, round all per unit answers to the nearest cent. 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. Total Per Unit Factory Overhead Cost Factory Overhead Cost Flutes Clarinets Oboes Total

Answer 1

Calculation for total labor hours

Products	budgeted volume(units)	direct labor hours per unit	Total labor hours
Flutes	2,600	0.40	1,040
Clarinets	900	1.40	1,260
Oboes	1,000	1.00	1,000
Total plant wide labor hours			3,300

A) Single plant wide overhead rate is = $ 112,200/ 3,300 hours = $ 34 per direct labor hour.

B) Calculation for total and per unit overhead to each products

Products	Total factory overhead cost	Per unit factory overhead cost
Flutes	2,600 unit X 13.6 = $ 35,360	$ 34 X 0.40 H = $ 13.6
Clarinets	900 units X $ 47.6 = $ 42,840	$ 34 X 1.40 H = $ 47.6
Oboes	1,000 units X $ 34 = $ 34,000	$ 34 X 1.00 H = $ 34
	Total = $ 112,200