Question

Single plantwide factory overhead rate Bach Instruments Inc. makes three musical instruments: flutes, clarinets, and oboes. The budgeted factory overhead cost is $82,800. 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 Flutes 2,300 units 0.5 Clarinets 700 1.4 Oboes 1,200 1.1 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

Answer.a. Plantwide overhead rate=Budgeted Overheads/Budgeted labor hours for the whole plant.

Budgeted Overheads=82,800

Budgeted production volume(x)	Direct Labor Hours(y)	Budgeted labor hours(x*y)
2300	0.5	1150 hours
700	1.4	980 hours
1200	1.1	1320 hours

Total budgeted labor hours=1150+980+1320=3450 hrs

Single plantwide overhead rate=82,800/3450=24 per labor hour.

b.

	Total Factory Overhead cost	Per Unit Factory Overhead Cost
Flutes	1150*24=27600	27600/2300=12
Clarinets	980*24=23520	23520/700=33.6
Oboes	1320*24=31680	31680/1200=26.4
Total	82,800