Question

1. Single Plantwide Factory Overhead Rate

   The total factory overhead for Urban Styles, Inc., is budgeted for the year at $1,025,000. Urban Styles manufactures two types of men's pants: jeans and khakis. The jeans and khakis each require five direct labor hours for manufacture. Each product is budgeted for 5,000 units of production for the year.

   When required, round all per unit answers to the nearest cent.

   a. Determine the total number of budgeted direct labor hours for the year.
   direct labor hours

   b. Determine the single plantwide factory overhead rate.
   $ per dlh

   c. Determine the factory overhead allocated per unit for each product using the single plantwide factory overhead rate.

   Jeans	$ per unit
   Khakis	$ per unit

Answer 1

a.	Total Budgeted Direct labor hours	=	50,000
b.	Single Plant wide Factory Overhead rate	=	$    20.50	per DLH
c.	Jeans	=	$ 102.50
	Khaki	=	$ 102.50
	Workings:
a.	Budgeted Direct labor hours	=	Budgeted units X Direct labor hours per unit
	Jeans	=	5000 X 5	=	25,000
	Khaki	=	5000 X 5	=	25,000
	Total Budgeted Direct labor hours	=			50,000
b.	Single Plant wide Factory Overhead rate	=	Total Budgeted Overhead expense / Total Budgeted Direct labor hours
		=	$1025000 / 50000
		=	$    20.50	per DLH
c.	Factory overhead allocated per unit	=	Single Plant wide Factory Overhead rate X Direct labor hours per unit
	Jeans	=	5 X $20.5	=	$       102.50
	Khaki	=	5 X $20.5	=	$       102.50