Question

The total factory overhead for Big Light Company is budgeted for the year at $1,701,700. Big Light manufactures two different products: night lights and desk lamps. Night lights are budgeted for 13,100 units. Each night light requires 3 hours of direct labor. Desk lamps are budgeted for 16,100 units. Each desk lamp requires 2 hours of direct labor a Determine the total number of budgeted direct labor hours for the year. direct labor hours b Determine the single plantwide factory overhead rate using direct labor hours as the allocation base. Round your answer to two decimal places. per direct labor hour c Determine the factory overhead allocated per unit for each product using the single plantwide factory overhead rate determined in (b). Round your answers to two decimal places. Night Lights per unit Desk Lamps per unit

Answer 1

rate positively ..

Ans a)	Computation of direct labor hr
		i	ii	iii=i*ii
		Unit	Hr required per unit	Total direct labor hr
	Night light	13100	3	39300
	Desk light	16100	2	32200
				71500
	ans =	71500	Direct labor hr
Ans b)	Overhead rate = budgeted overhead cost/Direct labor hr
		1701700/71500
		$   23.80	per direct labor hr
Ans c)
	Computation of factored overhead rate
		Labor hr per unit	Rate per hr	Overhead per unit
	Night light	3	$   23.80	$              71.40
	Desk light	2	$   23.80	$              47.60