Laval produces lamps and home lighting fixtures. Its most popular product is a b

Question

Laval produces lamps and home lighting fixtures. Its most popular product is a brushed aluminum desk amp. This lamp is made from components shaped in the fabricating department and assembled in its assembly department. Information related to the 31,000 desk lamps produced annuslly follow. Direct materials Direct labor 5 280,000 Fabricating department (9,000 DLH Assembly department (18,200 DLH $22 per DLH) 529 per DLH) 5 198,000 5 489,800 Machine hours Fabricating department Assembly department 15,300 MH 20,850 MH Expected overhead cost and related dsta for the two production departments followw. Direct labor hours Machine hours Overhead cost Fabricating 160,000 DLH 188,000 MH 335,000 DLH 132,000 MH 5 320,000 S 430,000 Required 1. Determine the plantwide overhead rate for Laval using direct labor hours as a base. (Round your answer to 2 decimal places.) stimated overhead cos Estimated direct labor costs

Explanation / Answer

Req 1: Total Maufacturing overheads: 320,000+430000= $750,000 Total Labouor hours: 160,000+335000 = 495,000 hours Pre-determined overhead rate: Estimated overheads/ Labouor hours Estimated Overheads $750,000 $1.52 per DLH Estimated Direct labour 495000 hrs Req2: Deptt. Overheads rate: Fabricating: Deptt overheads / machine hours = $ 320000/168000 MH = $1.90 per MH Assembling: Deptt overheads / Labour hours = $ 430,000 /335,000 DLH = $1.28 per DLH Total Manufacturing occst per unt: Material 260000 labour Fabrication(9000 DLH @22) 198000 Assembly (16200 DLH @ 29) 469800 Total Prime cost 927800 Add: Overheads Fabrication(15300 MH @$1.90) 29070 Assembly (16200 DLH @$1.28) 20736 Total Manufacturing cost 977606 Divide Number of units 31000 Cost per unit 31.54

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