Question

Single plantwide factory overed Bach Instruments Inc. makes three musical instruments: flutes, clarinets, and oboes. The budgeted factory overhead cost is $140,400. Overhead is allocated to the three products on the basis of direct labor hours. The products have the following budgeted production volume and direct labor hours per unit: Budgeted Production Direct Labor Hours Per Volume Unit Flutes 3,000 units 0.6 Clarinets 500 1.6 Oboes 1,300 1.0 If required, round all per unit answers to the nearest cent. a. Determine the single plantwide overhead rate. $ 140,400 X per direct labor hour b. Use the overhead rate in (a) to determine the amount of total and per unit overhead allocated to each of the three products, Total Per Unit Factory Overhead Cost Factory Overhead Cost Flutes 43,200 X 0.6 X Clarinets 500 X 1.6 X Oboes 1,300 X 1.0 X Total 93,600 X

Answer 1

(a)
			Total DLHs (A x B )
	Volume (A)	DLH per unit (B)
Flutes	3,000	$ 0.6	1,800
Clarinets	500	1.6	800
Oboes	1,300	1	1,300
		Total Budgeted DLH	3,900 DLHs
	Single Plantwide overhead rate      = Budgeted factory overhead cost / Toatl Budgeted DLHs     =   $ 140,400 / 3,900 DLHs	$ 36 per direct labor hour
b)
Product	Total DLHs	overhead rate	Total Factory Overhead Cost (A)	Total Units (B)	Per Unit Factory Overhead Cost (A / B)
Flutes	1,800	$ 36	$ 64,800	3,000	$ 21.60
Clarinets	800	$ 36	$ 28,800	500	$ 57.60
Oboes	1,300	$ 36	$ 46,800	1,300	$ 36
Total	3,900	$ 36	$ 140,400

(a)
Production department Factory Overhead rates
Pattern Department        = Budgeted actory overhead costs / Pattern Department DLHs        =   $ 125,400 / 1,900	$ 66 per dlh
Cut and Sew Department        = Budgeted actory overhead costs / Cut and Sew Department DLHs        =   $ 211,200 / 2,400	$ 88 per dlh
(b)
	Small Glove	Medium Glove	Large Glove
Pattern Department	$ 2.64 ($ 66 x 0.04 )	$ 3.30 ($ 66 x 0.05 )	$ 3.96 ($ 66 x 0.06 )
Cut and Sew Department	$ 7.04 ($ 88 x 0.08 )	$ 8.8 ($ 88 x 0.10 )	$ 10.56 ($ 88 x 0.12 )
	$ 9.68 per Unit	$ 12.1 per Unit	$ 14.52 per Unit