Question

the total factory overhead for Bardot marine company

Product Costs and Product Profitability Reports, using a Single Plantwide Factory Overhead Rate Elliott Engines Inc. produces three products-pistons, valves, and cams-for the heavy equipment industry. Elliott Engines has a very simple production process and product line and uses a single plantwide factory overhead rate to allocate overhead to the three products. The factory overhead rate is based on direct labor hours. Information about the three products for 2012 is as follows: Budgeted Volume Direct Labor Price Per Direct Materials (Units) Hours Per Unit Unit Per Unit Pistons 9,000 0.30 $51 $25 Valves 28,000 0.15 Cams 2,000 0.20 The estimated direct labor rate is $29 per direct labor hour. Beginning and ending inventories are negligible and are, thus, assumed to be vero. The budgeted factory overhead for Elliott Engines is $226,300. If required, round all per unit answers to the nearest cent a. Determine the plantwide factory overtad rate s per dih b. Determine the factory overhead and direct labor cost per unit for each product Direct Labor Factory Overhead Direct Labor Hours Per Unit Cost Per Unit Cost Per Unit Pistons Valves Cams

Answer 1

a. Plantwide overhead rate = Budgeted factory overhead/Budgeted direct labor hours = $226300/7300 = $31 per direct labor hour

Budgeted direct labor hours = (9000 x 0.30) + (28000 x 0.15) + (2000 x 0.20) = 2700 + 4200 + 400 = 7300

b.

	Direct Labor Hours Per Unit	Factory Overhead Cost Per Unit	Direct Labor Cost Per Unit
Pistons	0.30	9.30	8.70
Valves	0.15	4.65	4.35
Cams	0.20	6.20	5.80

Factory overhead cost per unit = Direct labor hours per unit x Plantwide overhead rate $31

Direct labor cost per unit = Direct labor hours per unit x Direct labor rate $29

c.

Elliott Engines Inc.
Product Line Budgeted Gross Profit Reports
For the Year Ended December 31, 20Y2
	Pistons	Valves	Cams
Revenues	459000	364000	136000
Product Costs
Direct Materials	225000	112000	58000
Direct Labor	78300	121800	11600
Factory Overhead	83700	130200	12400
Total Product Costs	387000	364000	82000
Gross Profit	72000	0	54000
Gross profit percentage of sales	15.7%	0.0%	39.7%

Working:

	Pistons	Valves	Cams
Revenues	=9000*51	=28000*13	=2000*68
Product Costs
Direct Materials	=9000*25	=28000*4	=2000*29
Direct Labor	=9000*8.7	=28000*4.35	=2000*5.8
Factory Overhead	=9000*9.3	=28000*4.65	=2000*6.2