Question

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 $115,600 Cut and Sew Department overhead 189,000 Total $304,600 The direct labor estimated for each production department was as follows: Pattern Department 1,700 direct labor hours Cut and Sew Department 2,100 Total 3,800 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 Small Glove Medium Glove Large Glove Pattern Department 0.05 0.06 0.07 Cut and Sew Department 0.07 0.09 0.11 Direct labor hours per unit 0.12 0.15 0.18 If required, round all per unit answers to the nearest cent. a. Determine the two production department factory overhead rates. Pattern Department $per dlh 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 Large glove $ per unit Feedback a. Calculate production department factory overhead rate for each department: Total Factory Overhead ÷ Direct Labor Hours = Department Factory Overhead Rate b. Calculate factory overhead per unit for each product: Department Rate x Direct Labor Hours per Product = Cost; Add the costs for both departments to obtain the overhead for each product unit.

Answer 1

As given in the question to calculate total factory overhead and factory overhead per unit for each product, the given question as been solved.

Facts of the question given Answer to the question: a. FOH rates for each dept Pattren Dept Direct labour hr per unit Small 0.05 Total factory overhead (A) Budgeted Hours Total FOH/DLH (B) Factory OH Medium 0.06 (C) (A)/(B) Large 0.07 0.18 Factory Over head for Patteren dept. 3,04,600 1,700.00 179.18 Cut and sew Direct labour hr per unit Factory Over head for Cut and sew de 3,04,600 145.05 2,100.00 Small 0.07 Medium 0.09 Budgeted OH Budgeted Hours Department Rate (A) Process Large 0.11 0.27 (B) (C) = (A)/(B) Pattren Dept 1,700 1,15,600 68 Budgeted Hours 90 Budgeted OH Cut and Sew dept Process 1,89,000 2,100 Pattren Dept 1,15,600 1,700 Cut and Sew 1,89,000 2,100 3,04,600 3,800

b. Calculate factory overhead per unit for each product Department Rate x Direct Labor Hours per Product Cost Department Direct labour hr Rate Pattren Dept Cost per unit (B) (C) (A)x(B) 3.4 (A) Small 68 0.05 Medium 68 0.06 4.08 Large 68 0.07 4.76 12.24 Department Direct labour hr Rate (A) Cut and sew dept Cost (C) = (A)x(B) 0.07 per unit (B) Small Medium Large 90 6.3 90 0.09 8.1 9.9 90 0.11 24.3 Add the costs for both departments to obtain the overhead for each product unit. Pattern Dept Cut and sew dept 12.24 24.3 36.54