Question

Exercise 17-6 Assigning overhead costs using the plantwide rate and departmental rate methods LO P1, P2 Laval produces lamps and home lighting fixtures. Its most popular product is a brushed aluminum desk lamp. This lamp is made from components shaped in the fabricating department and assembled in the assembly department Information related to the 35.000 desk lamps produced annually follows. $280,000 Direct materials Direct labor Fabricating department (7,000 DLR Assembly department (16,000 Machine hours Fabricating department Assembly department $20 per DLR) $29 per DLH) $140,000 $464,000 15.040 21,000 M Expected overhead cost and related data for the two production departments follow. Direct labor hours Machine hours Overhead cost Fabricating Asembly 75.000 125.000 80,000 MH62.500 $300,000 $200,000 Required: 1. Determine the plantwide overhead rate for Laval using directlabor hours as a base. 2. Determine the total manufacturing cost per unit for the aluminum desk lamp using the plantwide overhead rate. 3. Compute departmental overhead rates based on machine hours in the fabricating department and direct labor hours in the assembly department 4. Use departmental overhead rates from requirement 3 to determine the total manufacturing cost per unit for the aluminum desk lamps Complete this question by entering your answers in the tabs below. Prev 1 of 2 Next >

Answer 1

BC $ 500,000 $ 2.50 per direct labor hour 200,000 /s А 1 Estimated overhead costs 2 Estimated direct labor hours 3 2) 4 Direct materials 5 Direct Labor - Assembly 6 Direct Labor - Fabricating 7 Overhead 8 9 Total manufacturing costs 10 Units produced 11 Manufacturing cost per unit 12 3) $ $ 280,000 464,000 140,000 57,500 $ 941,500 35000 26.90 $ Departmental overhead rate 3.75 MH $ 1.60 DLH 13 14 Fabricating 15 Assembly 16 4) 17 Direct materials 18 Direct labor 19 Fabricating 20 Assembly $ 280,000 140,000 464,000 $ 21 $ 604,000 22 Overhead 23 Fabricating 24 Assembly 56,400 25,600 26 Total manufacturing cost 27 Units produced 28 Manufacturing cost per unit $ 82,000 $966,000 35000 27.60 per unit

=+B1/B2 per direct labor hour А 1 Estimated overhead costs 1=300000+200000 2 Estimated direct labor hours =75000+125000 3 2) 4 Direct materials 280000 5 Direct Labor - Assembly 464000 6 Direct Labor - Fabricating 140000 7 Overhead =+(7000+16000)*2.5 8 9 Total manufacturing costs =+B4+B5+B6+B7 10 Units produced 35000 11 Manufacturing cost per unit =+B9/10 123) Departmental 13 overhead rate 14 Fabricating =300000/80000 15 Assembly =200000/125000 16 4) 17 Direct materials 18 Direct labor 19 Fabricating 140000 20 Assembly 464000 |МН DLH 280000 21 =+B19+B20 =15040*3.75 =16000*1.6 22 Overhead 23 Fabricating 24 Assembly 25 26 Total manufacturing cost 27 Units produced 28 Manufacturing cost per unit =+B23+B24 =+C17+C21+C25 35000 =+C26/C27 per unit