Single Plantwide Factory Overhead Rate Spotted Cow Dairy Company manufactures three products—whole milk, skim milk, and...

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Single Plantwide Factory Overhead Rate Spotted Cow Dairy Company manufactures three products—whole milk, skim milk, and...

Single Plantwide Factory Overhead Rate

Spotted Cow Dairy Company manufactures three products—whole milk, skim milk, and cream—in two production departments, Blending and Packing. The factory overhead for Spotted Cow Dairy is $352,800.

The three products consume both machine hours and direct labor hours in the two production departments as follows:

		Direct Labor Hours		Machine Hours
Blending Department
Whole milk			250		630
Skim milk			270		580
Cream			220		230
			740		1,440
Packing Department
Whole milk			310		360
Skim milk			490		450
Cream			140		150
			940		960
	Total		1,680		2,400

Required:

1. Determine the single plantwide factory overhead rate, using each of the following allocation bases: (a) direct labor hours and (b) machine hours. If required, round all amounts to the nearest dollar.

a. Direct labor overhead rate	$ per direct labor hour
b. Machine hour overhead rate	$ per machine hour

2. Determine the product factory overhead costs, using (a) the direct labor hour plantwide factory overhead rate and (b) the machine hour plantwide factory overhead rate.

	Whole Milk	Skim Milk	Cream
Direct labor hours	$	$	$
Machine hours	$	$	$

business accounting

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Answer 1

Answer #1

Single Plantwide Rate = Total Overheads/Total labor hours

= 352800/1680

= $210 per direct labor hour

Machine hour overhead rate = 352800/2400

= $147 per machine hour

Overhead = Rate*Driver consumed
	Whole Milk	Skim Milk	Cream
Direct labor hours	117,600	159,600	75,600
Machine hours	145,530	151,410	55,860

В. А. 1 Overhead = Rate* Driver consumed C D 2 3 Direct labor hours 4 Machine hours Whole Milk Skim Milk Cream =(250+310)*210

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Answer 2

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