Question

 Single Plantwide Factory Overhead Rate

Gwinnett County Chrome Company manufactures three chrome-plated products—automobile bumpers, valve covers, and wheels. These products are manufactured in two production departments (Stamping and Plating). The factory overhead for Gwinnett County Chrome is $239,200.

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

		Direct Labor Hours			Machine Hours
Stamping Department
Automobile bumpers			590			810
Valve covers			310			570
Wheels			350			620
			1,250			2,000
Plating Department
Automobile bumpers			195			1,150
Valve covers			200			700
Wheels			195			750
			590			2,600
	Total		1,840			4,600

Required:

1.  Determine the single plantwide factory overhead rate, using each of the following allocation bases: (a) direct labor hours and (b) machine hours.

Direct labor hour overhead rate	$ per direct labor hour
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.

	Automobile Bumpers	Valve Covers	Wheels
Direct labor hours	$	$	$
Machine hours	$	$	$

Answer 1

1. Determine the single plantwide factory overhead rate, using each of the following allocation bases: (a) direct labor hours and (b) machine hours.

Direct labor hour overhead rate (239200/1840)	$130 per direct labor hour
Machine hour overhead rate (239200/4600)	$52 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.

	Automobile Bumpers	Valve Covers	Wheels
Direct labor hours	$102050	$66300	$70850
Machine hours	$101920	$66040	$71240