Question

Exercise 17-10 Assigning overhead costs using the plantwide rate and departmental rate methods LO P1, P2 Laval produces lamps and home lighting fixtures. Its most popular product is a brushed aluminum desk lamp. This lamp is made from components shaped in the fabricating department and assembled in the assembly department Information related to the 33.000 desk lamps produced annually follows. $275,000 Direct materials Direct labor Fabricating department (6.000 DLH X $27 per DLH) Assembly department (16,200 DLH X 529 per DLH) Machine hours Fabricating department Assembly department $162.000 $469,800 14,500 MH 21,200 MH Expected overhead cost and related data for the two production departments follow. Direct labor hours Machine hours Overhead cost Fabricating 160.000 DLH 168,000 H $380,000 Assembly 345,000 DLH 132,000 MH $430,000 Required 1. Determine the plantwide overhead rate for Laval using direct labor hours as a base 2. Determine the total manufacturing cost per unit for the aluminum desk lamp using the plantwide overhead rate. 3. Compute departmental overhead rates based on machine hours in the fabricating department and direct labor hours in the assembly department 4. Use departmental overhead rates from requirement 3 to determine the total manufacturing cost per unit for the aluminum desk lamps Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Determine the plantwide overhead rate for Laval using direct labor hours as a base

Answer 1

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Laval
Answer 1
Calculation of single plant wide OH Rate	Fabricating	Assembly	Total	Note
Direct Labor Hours	160,000.00	345,000.00	505,000.00	A
Total Overhead costs	380,000.00	430,000.00	810,000.00	B
Predetermined OH Rate			1.60	C=B/A
Workings for Answer 2
Overhead applied to aluminum desk lamp	Fabricating	Assembly	Total	Note
Direct Labor Hours	6,000.00	16,200.00	22,200.00	D
Predetermined OH Rate			1.60	See C
Overhead applied to aluminum desk lamp			35,607.92	E=C*D
Answer 2
Manufacturing cost	Fabricating	Assembly	Total	Note
Direct materials			275,000.00
Direct Labor	162,000.00	469,800.00	631,800.00
Overhead applied			35,607.92	See E
Manufacturing cost			942,407.92	F
Units produced			33,000.00	G
Manufacturing cost per unit			28.56	H=F/G
Answer 3
Calculation of department wise OH Rate	Fabricating	Assembly	Total	Note
Machine Hours	168,000.00	132,000.00	300,000.00	I
Total Overhead costs	380,000.00	430,000.00	810,000.00	See B
Predetermined OH Rate	2.26	3.26		J=B/I
Workings for Answer 4
Overhead applied to aluminum desk lamp	Fabricating	Assembly	Total	Note
Machine Hours	14,500.00	21,200.00	35,700.00	K
Predetermined OH Rate	2.26	3.26		See J
Overhead applied to aluminum desk lamp	32,797.62	69,060.61	101,858.23	L=K*J
Answer 4
Manufacturing cost	Fabricating	Assembly	Total	Note
Direct materials			275,000.00
Direct Labor	162,000.00	469,800.00	631,800.00
Overhead applied			101,858.23	See L
Manufacturing cost			1,008,658.23	M
Units produced			33,000.00	See G
Manufacturing cost per unit			30.57	N=M/G