Question

BE 4-2 Multiple production department factory overhead rates Obj. 3 The total factory overhead for Bardot Marine Company is budgeted for the year at $600,000 divided into two departments: Fabrication, $420,000, and Assembly, $180,000. Bardot Marine manufactures two types of boats: speedboats and bass boats. The speedboats require 8 direct labor hours in Fabrication and 4 direct labor hours in Assembly. The bass boats require 4 di- rect labor hours in Fabrication and 8 direct labor hours in Assembly. Each product is budgeted for 250 units of production for the year. Determine (A) the total number of budgeted direct labor hours for the year in each department, (B) the departmental factory overhead rates for both departments, and (C) the factory overhead allocated per unit for each product using the department factory overhead allocation rates.

Answer 1

a) Budgeted labor hour Fabrication = (250*8+250*4) = 3000 Hour

Budgeted labor hour assembly = (250*4+250*8) = 3000 Hour

b) Overhead rate

Fabrication = 420000/3000 = 140 per labor hour

Assembly = 180000/3000 = 60 per labor hour

c) Factory overhead per unit

	Speedboats	Bass boarts
Fabrication	140*8 = 1120	560
Assembly	60*4 = 240	480
Factory overhead cost per unit	1360	1040