Question

Instructions Direct Labor Hours Machine Hours Stamping Department Automobile bumpers 563 799 Valve covers 305 564 Wheels 341 601 1,209 1,964 Plating Department Automobile bumpers 172 1,169 Valve covers 178 713 Wheels 177 765 527 2,647 Total 1,736 4,611

Answer 1

According to the requirement of the question, we have to calculate single plant wide factory overhead rate, product factory overhead cost.

Requirement 1:- Determine the single plant wide factory overhead rate, using each of the following allocation bases : (A) direct labor hours and (B) machine hours

Solution:-

Direct labor overhead rate :	$128.45622	per direct labor hour
Machine hour overhead rate :	$48.36261	per machine hour

Working Note:-

Formula to calculate single plant wide overhead rate:

Single plant-wide overhead rate for direct labor    = Total factory overhead cost / Total Direct labor hours

Single plant-wide overhead rate = $223,000 / 1736 hours = $128.45622 per direct labor hour

Single plant-wide overhead rate for machine hours =  Total factory overhead cost / Total machine hours

Single plant-wide overhead rate for machine hours = $223,000 / 4611 hours = $48.36261   per machine hour

Requirement 2:- Determine the product factory overhead costs, using (A) the direct labor hour plant-wide factory overhead rate and (B) the machine hour plant-wide factory overhead rate

Solution:-

A. Product factory overhead Costs using direct labor hour plant-wide factory overhead rate

	Stamping Department	Planting Department	Total	Factory overhead rate per hour	Total product factory overhead
Automobile bumpers	563	172	735	$128.45622	$94,415.32
Valve Covers	305	178	483	$128.45622	$62,044.36
Wheels	341	177	518	$128.45622	$66,540. 32
			1736		$223,000.00

B. Product factory overhead Costs using machine hour plant-wide factory overhead rate

	Stamping Department	Planting Department	Total	Factory overhead rate per hour	Total product factory overhead
Automobile Bumpers	799	1169	1968	$48.36261	$95,177.62
Valve Covers	564	713	1277	$48.36261	$61,759.05
Wheels	601	765	1366	$48.36261	$66,063.33
			4611		$223,000.00

Thank you...