Question

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Multiple Production Department Factory Overhead Rate Method Performance Gloves, Inc. produces three sizes of sports gloves: small, medium, and large. A glove pattern is first stenciled onto leather in the Pattern Department. The stenciled patterns are then sent to the Cut and Sew Department, where the glove is cut and sewed together. Performance Gloves uses the multiple production department factory overhead rate method of allocating factory overhead costs. Its factory overhead costs were budgeted as follows: Pattern Department overhead $136,500 223,600 Cut and Sew Department overhead Total $360,100 The direct labor estimated for each production department was as follows: Pattern Department Cut and Sew Department Total 2,100 direct labor hours 2,600 4,700 direct labor hours Direct labor hours are used to allocate the production department overhead to the products. The direct labor hours per unit for each product for each production department were obtained from the engineering records as follows: Production Departments Large Glove Small Glove Medium Glove 0.04 0.05 0.06 Pattern Department Cut and Sew Department 0.07 0.09 0.11 Direct labor hours per unit 0.11 0.14 0.17 If required, round all per unit answers to the nearest cent. a. Determine the two production department factory overhead rates. Pattern Department per dih Cut and Sew Department per dlh b. Use the two production department factory overhead rates to determine the factory overhead per unit for each product. Small glove per unit Medium glove per unit per unit Large glove

Answer 1

Overheas rate = Estimated overhead/Estimated allocation base ( Direct labour hours)

Particulars	Pattern Department	Cut and Sew Department
Budgeted Overhead	136500	223600
Direct Labour Hours	2100	2600
Factory overhead rate	65 per dlh	86 per dlh

(b) - Calculation of factory overhead per unit

Particulars	Small Glove	Medium Glove	Large Glove
Pattern Department	$2.60 (0.04*$65)	$3.25 (0.05*$65)	$3.90 (0.06*$65)
Cut and Sew Department	$6.02 (0.07*$86)	$7.74 (0.09*$86)	$9.46 (0.11*$86)
Total Factory Overhead Per unit	$8.62	$10.99	$13.36