49. The total factory overhead for Big Light Company is budgeted for the year at

Question

49. The total factory overhead for Big Light Company is budgeted for the year at $1,708,680. Big Light manufactures two different products - night lights and desk lamps. Night lights is budgeted for 12,500 units. Each night light requires two hour of direct labor. Desk lamps is budgeted for 24,400 units. Each desk lamp requires three hours of direct labor.

a Determine the total number of budgeted direct labor hours for year.

b Determine the single plantwide factory overhead rate using direct labor hours as the allocation base. Round your answer to two decimal places, if necessary.
$

c Determine the factory overhead allocated per unit for each product using the single plantwide factory overhead rate calculated in (b). Round your answers to two decimal places, if necessary.

Night Lights =

$

Desk Lamps =

$

Night Lights =

$

Desk Lamps =

$

Explanation / Answer

a. Calculation of Budgeted Direct labour hours

Night lamps = 12500*2 = 25000 hrs

Desk lamps = 24400*3 = 73200 hrs

Total = 98200 hrs

b. Factory overhead rate = 1708680/ 98200hrs = 17.4/ hr

Night lamps = 17.4 * 25000/98200 = 4.43

Desk lamps = 17.4 * 73200/98200 = 12.97

c. Calculation of Factory overhead allocated per unit

Night lamps = 25000*4.43 = 110750/12500 = 8.86

Desk lamps = 73200*12.97 = 949404/24400 = 38.91

Thank you

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