Activity-Based Costing: Factory Overhead Costs

The total factory overhead for Bardot Marine Company is budgeted for the year at $692,500, divided into four activities: fabrication, $325,000; assembly, $120,000; setup, $135,000; and inspection, $112,500. 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	6,250	dlh	18,000	dlh	45	setups	78	inspections
Bass boat	18,750		6,000		330		547
	25,000	dlh	24,000	dlh	375	setups	625	inspections

Each product is budgeted for 7,500 units of production for the year.

a. Determine the activity rates for each activity.

Fabrication	$fill in the blank 1 per direct labor hour
Assembly	$fill in the blank 2 per direct labor hour
Setup	$fill in the blank 3 per setup
Inspection	$fill in the blank 4 per inspection

b. Determine the activity-based factory overhead per unit for each product. Round to the nearest whole dollar.

Speedboat	$fill in the blank 5 per unit
Bass boat	$fill in the blank 6 per unit

Single plantwide factory overhead rate

Bach Instruments Inc. makes three musical instruments: flutes, clarinets, and oboes. The budgeted factory overhead cost is $148,400. Overhead is allocated to the three products on the basis of direct labor hours. The products have the following budgeted production volume and direct labor hours per unit:

	Budgeted Production Volume		Direct Labor Hours Per Unit
Flutes	2,200	units	0.8
Clarinets	500		1.5
Oboes	1,000		1.2

If required, round all per unit answers to the nearest cent.

a. Determine the single plantwide overhead rate. $fill in the blank 1 per direct labor hour

b. Use the overhead rate in (a) to determine the amount of total and per-unit overhead allocated to each of the three products.

	Total Factory Overhead Cost	Per Unit Factory Overhead Cost
Flutes	$fill in the blank 2	$fill in the blank 3
Clarinets	fill in the blank 4	fill in the blank 5
Oboes	fill in the blank 6	fill in the blank 7
Total	$fill in the blank 8