1 PR 18-018 Single Plantwide Factory Overhead Rate ry Company manufactures three

Question

1 PR 18-018 Single Plantwide Factory Overhead Rate ry Company manufactures three products- whole e milk, skim milk, and cream-in two production departments, Blending and Packing. The milk, and factory overhead for Spotted Cow Dairy is $299,700 The three products consume both m achine hours and direct labor hours in the two production departments as follows: Direct Labor Hours Machine Hours Blending Department Whole milk Skim millk Cream 260 245 215 720 650 710 260 1,620 Packing Department Whole milk Skim milk Cream 470 300 130 900 1,620 500 415 165 1,080 2,700 Total Required: 1. Determine the single plantwide factory overhead rate, using each of the following allocation bases: (a) direct labor hours and (b) machine hours. Direct labor hour overhead rate per direct labor hour Machine hour overhead rateper machine hour 2. Determine the product factory overhead costs, using (a) the direct labor hour plantwide factory overhead rate and (b) the machine hour plantwide factory overhead rate. Whole Milk Skim Milk Direct labor hours Machine hours Check My Work Progress: 1/1 items

Explanation / Answer

1. Determine the multiple production department factory overhead rates, using direct labor hours for the Blending Department and machine hours for the Packing Department. Blending Department = $299,700/1620 DLH $185.00 per direct labor hour Packing Department = $299,700/2700 MH $111.00 per machine hour 2. Determine the product factory overhead costs, using the multiple production department rates in (1). Whole milk Skim milk Cream Direct Labour Hours Blending 260 245 215 Direct Labour Hours Packing Department 470 300 130 Rate $185.00 Blending Department factory overhead $48,100.00 $45,325.00 $39,775.00 Packing Department factory overhead $86,950.00 $55,500.00 $24,050.00 Total factory overhead $135,050.00 $100,825.00 $63,825.00 Direct Labour Hours Whole milk Skim milk Cream Direct Labour Hours Blending 650 710 260 Machine Hours Packing Department 500 415 165 Rate $111.00 Blending Department factory overhead $72,150.00 $78,810.00 $28,860.00 Packing Department factory overhead $55,500.00 $46,065.00 $18,315.00 Total factory overhead $127,650.00 $124,875.00 $47,175.00 Machine Hours

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