Question

Unit Single plantwide factory overhead rate Bach Instruments Inc. makes three musical instruments: flutes, clarinets, and oboes. The budgeted factory overhead cost is $101,040. 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 2,700 units 0.8 500 1,300 If required, round all per unit answers to the nearest cent. a. Determine the single plantwide overhead rate. 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 Clarinets Oboes 1.5 1.0 Flutes Clarinets Oboes Total

Answer 1

	Budgeted production volume [A]	Direct labor hours per unit [B]	Total direct labor hours [A*B]
Flutes	2700	0.8	2160
Clarinets	500	1.5	750
Oboes	1300	1.0	1300
Total			4210

a.
Single plantwide overhead rate = Budgeted factory overhead cost / Budgeted total direct labor hours = 101040 / 4210 =	24	per direct labor hour

b.
	Total direct labor hours [A]	Single plantwide overhead rate [B]	Total factory overhead cost [A*B] [C]	Budgeted production volume [D]	Per unit factory overhead cost [C/D]
Flutes	2160	24	51840	2700	19.20
Clarinets	750	24	18000	500	36.00
Oboes	1300	24	31200	1300	24.00
Total	4210	24	101040