The total factory overhead for Bardot Marine Company is budgeted for the year at

Question

The total factory overhead for Bardot Marine Company is budgeted for the year at $600,000, divided into four activities: fabrication, $204,000; assembly, $105,000; setup, $156,000; and inspection, $135,000. Bardot Marine manufactures two types of boats: speedboats and bass boats. The activity-base usage quantities for each product by each activity are as follows: Fabrication Assembly Setup Inspection Speedboat 2,000 dlh 1,000 dlh 300 setups 1,100 inspections Bass boat 1,000 2,000 100 400 3,000 dlh 3,000 dlh 400 setups 1,500 inspections Each product is budgeted for 250 units of production for the year.

Explanation / Answer

FABRICATION COST PER DIRECT LABOUR HOUR

= $204000 / 3000 DLH

= $68 PER DLH

ASSEMBLY COST PER DIRECT LABOUR HOUR

= $105000 / 3000 DLH

= $35 PER DLH

SET UP COST PER SET UP

= $156000 / 400

= $390 PER SET UP

INSPECTION COST PER INSPECTION

= $135000 / 1500

= $90 PER INSPECTION

FABRICATION

2000 * $68

1000 * $68

ASSEMBLY

1000 * $35

2000 * $35

SET UP

300 * $390

100 * $390

INSPECTION

1100 * $90

400 * $90

DESCRIPTION SPEED BOATS BASS BOATS

FABRICATION

2000 * $68

1000 * $68

$136000 $68000

ASSEMBLY

1000 * $35

2000 * $35

$35000 $70000

SET UP

300 * $390

100 * $390

$117000 $39000

INSPECTION

1100 * $90

400 * $90

$99000 $36000 TOTAL COST $387000 $213000 NUMBER OF PRODUCTS 250 250 FACTORY OVERHEAD PER UNIT $1548 $852

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