ANSWER:
1. Total direct labor hours = (80,000 x $0.10) + (60,000 x $0.20) + (20,000 x $0.50) = 8000+ 12000 + 10000 = 30000 direct labor hours
Total Overhead Costs = $420,000
Overhead Rate per direct labor hour = Total Overhead Costs/ Total direct labor hours = $420000/30000 = $ 14
2. Calculation of Direct Labour costs per Product :
Fluffs= 80,000 x 0.10 x $8.5 = $68,000
Crinkles=60,000 x 0.20 x $8.5 = $1,02,000
Snaps=20,000 x 0.50 x $8.5 = $85,000
3. Calculation of direct Material Costs
Fluffs= 80,000 x $0.75 = $60,000
Crinkles=60,000 x $0.40 = $24,000
Snaps=20,000 x $0.30 = $6000
4. Product Overheads ( According to the overhead rate calculated above)
Fluffs= 8000 x $14 = $112000
Crinkles=12000 x $14 = $168000
Snaps=10000 x $14 = $140000
Therefore,
(A) plantwide factory overhead rate = $14
(B) product cost of each product:
Total product Costs:
Fluffs= $68,000 + $60,000 + $112000 = $240000
Crinkles=$102000+ $ 24000+ $ 168000 = $294000
Snaps= $ 85,000 + $6000+ $140000 = $231000
Cost per box:
Fluffs = $240000/80000 = $3
Crinkles = $294000/60000 = $4.9
Snaps = $231000/20000 = $11.55
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