Question

The total factory overhead for Bardot Marine Company is budgeted for the year at $897,000, divided into two departments: Fabrication, $711,000, and Assembly, $186,000. Bardot Marine manufactures two types of boats: speedboats and bass boats. The speedboats require three direct labor hours in Fabrication and three direct labor hours in Assembly. The bass boats require three direct labor hours in Fabrication and one direct labor hour in Assembly. Each product is budgeted for 6,000 units of production for the year. If required, round all per unit answers to the nearest cent. a. Determine the total number of budgeted direct labor hours for the year in each department. Fabrication direct labor hours Assembly direct labor hours b. Determine the departmental factory overhead rates for both departments. Fabrication per dlh Assembly per dih c. Determine the factory overhead allocated per unit for each product using the department factory overhead allocation rates. Speedboat: $ per unit

Answer 1

Solution a:
Total Budgeted Direct labor Hours in Each department
	Fabrication	Assembly
Speedboats:
Units	6000	6000
*Hours per unit	3	3
Total Hours required by Speedboats (a)	18000	18000
Bass boats:
Units	6000	6000
*Hours per unit	3	1
Total Hours required by Speedboats (b)	18000	6000
Total Budgeted Direct labor Hours in Each department (a+b)	36000	24000
Solution b:
Computation of Departmental overhead rate for Each department
Particulars	Fabrication	Assembly
Budgeted Manufacturing Overhead	$7,11,000	$1,86,000
/Budgeted direct labor hours	36000	24000
Departmental Overhead rate	$19.75	$7.75
Solution c:
Computation of Overhead allocated per unit
SpeedBoat:
	Fabrication	Assembly
Total Hours required by Speedboats	18000	18000
*Departmental Overhead rate	$19.75	$7.75
Manufacturing overhead allocated	$3,55,500	$1,39,500
Total Factory Overhead Allocated to Speedboats	$4,95,000
/units	6000
Overhead allocated per unit	$82.50
Computation of Overhead allocated per unit
Bass Boat:
	Fabrication	Assembly
Total Hours required by Bass boats	18000	6000
*Departmental Overhead rate	$19.75	$7.75
Manufacturing overhead allocated	$3,55,500	$46,500
Total Factory Overhead Allocated to Bass boats	$4,02,000
/units	6000
Overhead allocated per unit	$67.00