Question

Laval produces lamps and home lighting fixtures. Its most popular product is a brushed aluminum desk lamp. This lamp is made from components shaped in the fabricating department and assembled in the assembly department. Information related to the 26,000 desk lamps produced annually follows. $275,000 Direct materials Direct labor Fabricating department (9,000 DLH ~ $25 per DLH) Assembly department (15,800 DLH ~ $26 per DLH) Machine hours Fabricating department Assembly department $225,000 $410,800 15,100 MH 20,950 MH Expected overhead cost and related data for the two production departments follow. Direct labor hours Machine hours Overhead cost Fabricating 200,000 DLH 154,000 MH $350,000 Assembly 325,000 DLH 131,000 MH $420,000

Answer 1

A B C D 1.47 per direct labor hour $ 770,000 $ 525,000 1 Estimated overhead costs 2 Estimated direct labor hours 3 2) 4 Direct materials 5 Direct Labor - Fabricating 6 Direct Labor - Assembly 7 Overhead 8 9 Total manufacturing costs 10 Units produced 11 Manufacturing cost per unit $ $ $ $ 275,000 225,000 410,800 36,456 $ 947,256 26000 $ 36.43 12 3) 13 14 Fabricating 15 Assembly Departmental overhead rate $ 2.27 MH $ 1.29 DLH 16 4) $275,000 $ $ 225,000 410,800 $635,800 17 Direct materials 18 Direct labor 19 Fabricating 20 Assembly 21 22 Overhead 23 Fabricating 24 Assembly 25 26 Total manufacturing cost 27 Units produced 28 Manufacturing cost per unit $ $ 34,277 20,382 $ 54,659 $965,459 26000 37.13 per unit

C =+B1/B2 D per direct labor hour А B 1 Estimated overhead costs =350000+420000 2 Estimated direct labor hours =200000+325000 3 2) 4 Direct materials 275000 5 Direct Labor - Fabricating 225000 6 Direct Labor - Assembly 410800 7 Overhead =+(9000+15800) *1.47 8 9 Total manufacturing costs =+B4+B5+B6+B7 10 Units produced 26000 11 Manufacturing cost per unit =+B9/B10 123) 13 14 Fabricating 15 Assembly Departmental overhead rate =350000/154000 -420000/325000 MH DLH 16 4) 275000 225000 410800 =+B19+B20 17 Direct materials 18 Direct labor 19 Fabricating 20 Assembly 21 22 Overhead 23 Fabricating 24 Assembly 25 26 Total manufacturing cost 27 Units produced 28 Manufacturing cost per unit =15100*2.27 =15800*1.29 =+B23+B24 =+C17+C21+C25 26000 =+C26/C27 per unit