Multiple production department factory overhead rates The total factory overhead
ID: 2426449 • Letter: M
Question
Multiple production department factory overhead rates
The total factory overhead for Diva-nation is budgeted for the year at $208,816, divided into two departments: Cutting, $66,960, and Sewing, $141,856. Diva-nation manufactures two types of men’s pants: jeans and khakis. The jeans require 0.03 direct labor hour (dlh) in Cutting and 0.08 direct labor hour in Sewing. The khakis require 0.06 direct labor hour in Cutting and 0.03 direct labor hour in Sewing. Each product is budgeted for 24,800 units of production for the year.
A. Determine the total number of budgeted direct labor hours for the year in each department.
Cutting
direct labor hours
Sewing
direct labor hours
B. Determine the departmental factory overhead rates for both departments. When required, round all per-unit answers to the nearest cent.
Cutting
per dlh
Sewing
per dlh
C. Determine the factory overhead allocated per unit for each product using the department factory overhead allocation rates. When required, round all per-unit answers to the nearest cent.
Jeans
per unit
Khakis
per unit
Cutting
direct labor hours
Sewing
direct labor hours
Explanation / Answer
a. Cutting: (24800 jeans × 0.03 dlh) + (24800 khakis × 0.06 dlh)
= 2232 direct labor hours
Sewing: (24800 jeans × 0.08 dlh) + (24800 khakis × 0.03 dlh)
= 2728 direct labor hours
b. Cutting Department rate: $66960 ÷ 2232 dlh = $30 per dlh
Sewing Department rate: $141856÷ 2728 dlh = $52 per dlh
c.
Jeans : Cutting Department 0.03 dlh × $30 =: $0.09
Sewing Department 0.08 dlh × $52 = 4.16
Total factory overhead per pair of jeans = 4.25
Khakis: Cutting Department 0.06 dlh × $30 = $1.8
Sewing Department 0.03 dlh × $52 = 1.56
Total factory overhead per pair of khakis $3.36
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