Question

Ratchford Clocks manufactures alarm clocks and wall clocks and allocates overhead based on direct labor hours. The production process is set up in three departments: Assembly, Finishing, and Calibrating. The following is information regarding the direct labor used to produce one unit of the two clocks: Per Unit Hours: Assembly Finishing Calibrating 3 1 1 Alarm clocks Wall clocks 2 3 2 5 4 3 The budget includes the following factory overhead by department: Assembly Department Finishing Department Calibrating Department 5595,000 200,000 140,000 5935,000 Total dlh Ratchford Clocks is planning to manufacture 50,000 alarm clocks and 10,000 wall clocks. a. Determine the total number of hours that will be needed by department Assembly dih Finishing Calibrating dlh b. Determine the factory overhead rate by department using the multiple production department factory overhead rate method. Round your answers to two decimal places, if necessary. Assembly per direct labor hour Finishing per direct labor hour Calibrating per direct labor hour c. Determine the amount of factory overhead to be allocated to each unit of alarm clocks and wall clocks. Round your answers to two decimal places, if necessary. Alarm Clock per unit Wall Clock per unit d. Determine the amount of total factory overhead to be allocated to the alarm clocks and wall clocks.

Answer 1

fx A B с D E 1 2. 3 a Assembly Finishing Calibrating 170,000 dih 80,000 dlh 70,000 dlh 4 5 6 Working 7 8 9 Assembly Finishing Calibrating =(3*50000)+(2*10000) dlh =(1*50000)+(3*10000) dlh =(1*50000)+(2*10000) dih 10 11 12 13 b Assembly Finishing Calibrating 3.5 per direct labor hour 2.5 per direct labor hour 2 per direct labor hour 14 15 Working 16 17 18 19 Assembly Finishing Calibrating =595000/170000 =200000/80000 =140000/70000 per direct labor hour per direct labor hour per direct labor hour 20 21 22 23 c Alarm Clock Wall Clock 15 per unit 18.5 per unit 24 25 Working 26 27 Alarm Clock Wall Clock =(3*3.5)+(1*2.5)+(1*2) per unit =(2*3.5)+(3*2.5)+(2*2) per unit 28 29 30 31 d Alarm Clock Wall Clock Total Factory Overhead 750,000 185,000 935,000 32 33 34 Working 35 36 37 Alarm Clock Wall Clock =50000* 15 = 10000* 18.5 38