Question

The total factory overhead for Bardot Marine Company is budgeted for the year at $2,520,000. Bardot Marine manufactures two types of boats: speedboats and bass boats. The speedboat and bass boat each require five direct labor hours for manufacture. Each product is budgeted for 12,000 units of production for the year. When required, round all per unit answers to the nearest cent. a. Determine the total number of budgeted direct labor hours for the year. X direct labor hours b. Determine the single plantwide factory overhead rate. $ x per dih c. Determine the factory overhead allocated per unit for each product using the single plantwide factory overhead rate. Speedboat $ per unit Bass boat $ per unit

Answer 1

a. Total number of budgeted direct labor hours for the year    [Refer working note 1]
120,000	direct labor hours
b. Single plantwide factory overhead rate [Refer working note 2]
$21	per dlh
c. Factory overhead allocated per unit     [Refer working note 3]
Speedboat	$105	per unit
Bass boat	$105	per unit

Working note 1 - Calculation of total number of budgeted labor hours
Number of direct labor hours required for speedboats [12,000 units x 5 hours]	60,000
Number of direct labor hours required for bass boats   [12,000 units x 5 hours]	60,000
total number of budgeted labor hours                         [60,000 + 60,000]	120,000

Working note 2 - Calculation of Single plantwide factory overhead rate
Budgeted overhead cost                                           (a)	$2,520,000
Total number of budgeted labor hours                    (b)	120,000
Single plantwide factory overhead rate                   (a / b)	$21.00

Working note 3 - Computation of overhead cost per unit
	Speedboat	Bass boat
Direct labor hours used             [Refer working note 1]       (a)	60,000	60,000
Overhead rate                             [Refer working note 2]         (b)	$21	$21
Overhead allocated                                                      (c = a x b)	$1,260,000	$1,260,000
Production ( In units)                                                    (d)	12,000	12,000
Overhead cost per unit                                                (c / d)	$105	$105