Question

A CH 18 EX 2,3,4,8,10,12,19,20 X Single Plantwide Factory Overhead Rate Mozart Music Inc. makes three musical instruments: trumpets, tubas, and trombones. The budgeted factory overhead cost is $3,469,400. Factory 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 Direct Labor Hours Per Volume Unit Trumpets 4,000 units 1.2 Tubas 1,200 0.9 Trombones 2,500 1.3 a. Determine the single plantwide factory overhead rate. X per direct labor hour $ b. Use the factory overhead rate in (a) to determine the amount of total and per-unit factory overhead allocated to each of the three products. Total Factory Overhead Cost Per Unit Factory Overhead Cost Trumpets Tubas X Trombones Total Feedback Check My Work a. First calculate: Budgeted production volume x direct labor hours per unit = direct labor hours per product. Add all product hours for total direct labor hours. Next: Total Budgeted Factory Overhead = Total Budgeted Direct Labor Hours - Single Plantwide Factory Overhead Rate b. Rate in (a) x Direct labor hours for each product = Overhead for each. Add all overhead amounts to obtain the total. Divide individual overhead amounts by budgeted production volume for each product to obtain overhead per unit Learning Objective 2.

Answer 1

Answers

• Requirement [a]

A	Budgeted Factory Overhead	$      3,469,400.00
B	Total Direct Labor Hours [DLHs]	9,130
C = A/B	Overhead rate per DLH	$                  380.00 ANSWER

--Working for DLHs

	Units	DLH per unit	Total DLHs
	[A]	[B]	[C = A x B]
Trumpets	4,000	1.2	4,800
Tubas	1,200	0.9	1,080
Trombones	2,500	1.3	3,250
Total Direct Labor Hours [DLHs]			9,130

• Requirement [b]

--Answers, with calculation data.

	No. of DLHs	Total factory Overhead Cost	Units	Per unit Factory Overhead cost
	[A]	[B = A x 380]	[C]	[D = B/C]
Trumpets	4,800	$    1,824,000.00	4,000	$                456.00
Tubas	1,080	$        410,400.00	1,200	$                342.00
Trombones	3,250	$    1,235,000.00	2,500	$                494.00
TOTAL		$     3,469,400.00