Question

Single Plantwide Factory Overhead Rate

Mozart Music Inc. makes three musical instruments: trumpets, tubas, and trombones. The budgeted factory overhead cost is $120,700. Factory 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 Volume		Direct Labor Hours Per Unit
Trumpets	2,900	units	0.5
Tubas	400		1.4
Trombones	1,400		1.1

If required, round all per unit answers to the nearest cent.

a. Determine the single plantwide factory overhead rate.
$ per direct labor hour

b. Use the factory overhead rate in (a) to determine the amount of total and per-unit factory overhead allocated to each of the three products.

	Total Factory Overhead Cost	Per Unit Factory Overhead Cost
Trumpets	$	$
Tubas
Trombones
Total	$

Answer 1

Total overhead cost	=	120700
Total direct labor hours	(2900*.5)+(400*1.4)+(1400*1.1)
	3550
a)
Single plantwide factory overhead rate	120700/3550
	34	per direct labor hour
b)
	Units	Direct labor hour per unit	Total direct labor hours	Total Factory Overhead Cost	Per unit factory overhead cost
Trumpets	2900	0.5	1450	49300	17
Tubas	400	1.4	560	19040	47.6
Trombones	1400	1.1	1540	52360	37.4
Total	4700			120700

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