Chapter 18 PR 18-2B

PR.18-02B.ALGO

Hide or show questions

Progress:1/1 items

eBook

Calculator

Multiple Production Department Factory Overhead Rates

Spotted Cow Dairy Company manufactures three productswhole milk, skim milk, and creamin two production departments, Blending and Packing. The factory overhead for Spotted Cow Dairy is $530,200.

The three products consume both machine hours and direct labor hours in the two production departments as follows:

		Direct Labor Hours			Machine Hours
Blending Department
Whole milk			850			1,150
Skim milk			540			930
Cream			410			730
			1,800			2,810
Packing Department
Whole milk			250			1,670
Skim milk			260			1,030
Cream			245			1,100
			755			3,800
	Total		2,555			6,610

The management of Spotted Cow Dairy Company now plans to use the multiple production department factory overhead rate method. The total factory overhead associated with each department is as follows:

Blending Department	$306,000
Packing Department	224,200
Total	$530,200

Required:

If required, round all amounts to the nearest dollar.

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	$ per direct labor hour
Packing Department	$ per machine hour

2. Determine the product factory overhead costs, using the multiple production department rates in (1).

Whole milk

Skim milk

Cream

Blending Department factory overhead

$

$

$

Packing Department factory overhead

Total factory overhead

$

$

$

it is not this

	Whole milk	Skim milk	Cream
Blending Department factory overhead	144500	91800	69700
Packing Department factory overhead	98530	60770	64900
Total factory overhead	243030	152570	134600