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Adam Davis

Acct 212: 2016 Spring B15

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Laval produces lamps and home lighting fixtures. Its most popular product is a brushed aluminum desk lamp. This lamp is made from components shaped in the fabricating department and assembled in its assembly department. Information related to the 28,000 desk lamps produced annually follow.

Direct materials		$	270,000
Direct labor
Fabricating department (7,000 DLH $30 per DLH)		$	210,000
Assembly department (15,800 DLH $22 per DLH)		$	347,600
Machine hours
Fabricating department			15,200	MH
Assembly department			20,550	MH

Expected overhead cost and related data for the two production departments follow.

	Fabricating	Assembly
Direct labor hours			210,000	DLH				260,000	DLH
Machine hours			156,000	MH				133,000	MH
Overhead cost		$	400,000				$	440,000

Required
1.	Determine the plantwide overhead rate for Laval using direct labor hours as a base.

2.	Determine the total manufacturing cost per unit for the aluminum desk lamp using the plantwide overhead rate.(Round the intermediate calculations to 2 decimal places for overhead costs.)

3.	Compute departmental overhead rates based on machine hours in the fabricating department and direct labor hours in the assembly department.(Round your answers to 2 decimal places.)

4.	Use departmental overhead rates from requirement 3 to determine the total manufacturing cost per unit for the aluminum desk lamps.(Round the intermediate calculations to 2 decimal places for overhead costs.)