Orange County Chrome Company manufactures three chrome-plated products—automobil
ID: 2425895 • Letter: O
Question
Orange County Chrome Company manufactures three chrome-plated products—automobile bumpers, valve covers, and wheels. These products are manufactured in two production departments (Stamping and Plating). The factory overhead for Orange County Chrome is $224,698.
The three products consume both machine hours and direct labor hours in the two production departments as follows:
The management of Orange County Chrome Company now plans to use the multiple production department factory overhead rate method. The total factory overhead associated with each department is as follows:
1
Stamping Department
$111,135.00
2
Plating Department
113,563.00
3
Total
$224,698.00
Determine the product factory overhead costs, using the multiple production department rates in (1).
1. Determine the multiple production department factory overhead rates, using direct labor hours for the Stamping Department and machine hours for the Plating Department.
per machine hour
2. Determine the product factory overhead costs, using the multiple production department rates in (1).
1
Automobile Bumpers
Valve Covers
Wheels
2
3
4
Total
Direct Labor Hours Machine Hours Stamping Department Automobile bumpers 556 795 Valve covers 297 557 Wheels 342 602 1,195 1,954 Plating Department Automobile bumpers 165 1,169 Valve covers 179 713 Wheels 180 759 524 2,641 Total 1,719 4,595Explanation / Answer
1. CALCULATION OF OVERHEAD RATE / HR FOR EACH DEPTT STAMPING DEPTT PLATING DEPTT Overhead Rate = Total Overhead Total Overhead Direct Labour Hrs Machine Hrs Overhead Rate = $111,135 $113,563 1195 Hr 2641 Hr $93/Hr $43/Hr 2. product factory overhead costs, using the multiple production department rates in (1) PARTICULARS Automobile Bumpers Valve Covers Wheels STAMPING DEPTT Direct Labour Hrs 556 297 342 Factory O/H for Stamping Deptt ( $93/D.L Hr)(1) 51708 27621 31806 PLATING DEPTT Direct Labour Hrs 1169 713 759 Factory O/H for Plating Deptt ( $43/MAchine Hr) (2) 50267 30659 32637 TOTAL OVERHEAD (1+2) 101975 58280 64443
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