Multiple Production Departunent Factory Overheed Rate Method Performance cloves,

ID: 2545291 • Letter: M

Question

Multiple Production Departunent Factory Overheed Rate Method Performance cloves, Inc. produces three sizes of sperts glaves: smal, medium, and large. A glove pattern is first stenciled onto leather in the Pattern Department. The stenciled patterns are then sent to the Cut and Sew Department, where the glove is cut and sewed tngather. Parfarmanca Gs es tha milhpa production napartment factary overhead rate mathnd af allacatng fachory overhaad cos. s tactery avarhaad costs wra hudgatad as tolows: $165,20 273,000 Total $438,200 The drect laor estimated tor each praduction department was as tollows: 2,900 direct labor hours 3,500 6,300 drect labor hours Pattern Departrent Total Cirect laber hours are used to allocate the production department overhead to the preducts. The direct labor hours per unit for each product for each production department were obtained from the engineering records as folows: Production Dcpartments Small Glove Medium Glovc Large Glove Pattern Department 0.00 0.10 0,12 Diract labor hours per unit If required, round all per unit answer to the nearest cent. a. Dctrmine th two production department factory overhead rates. 0.12 0.15 0.16 out end Sew Deparument per din b. Use the twu production depdrunent ractory uve'heed 'ates to determine, uitt rectory we'heed pen unit ror ach product. Smal glove Medium glove Large gove per urit per uriit per unit

Explanation / Answer

Answer

Overhead

Total direct labor hours

Rate per Direct labor hours

Pattern Department

$165200

2800

$59 per DH

Cut & Sew Department

$273000

3500

$78 per DH

TOTAL

$438200

6300

Small Glove

Medium Glove

Large Glove

Pattern Department:

Direct labor hours per unit (1)

0.04

0.05

0.06

Overhead rate per DLH calculated above ($) (2)

Overhead per unit (A) ( 1 X 2)

$2.36

$2.95

$3.54

Cut & Sew Department:

Direct labor hours per unit (3)

0.08

0.1

0.12

Overhead rate per DLH calculated above (4)

Overhead per unit (B) – (3 x 4(

$6.24

$7.8

$9.36

Total Overhead cost per unit (A + B) – ANSWER

$8.6

$10.75

$12.9