Question
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
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 the assembly department. Information related to the 22,000 desk lamps produced annually follows.
Direct materials | $ | 270,000 | |
Direct labor | |||
Fabricating department (6,500 DLH × $29 per DLH) | $ | 188,500 | |
Assembly department (15,200 DLH × $26 per DLH) | $ | 395,200 | |
Machine hours | |||
Fabricating department | 15,000 | MH | |
Assembly department | 20,450 | MH | |
Expected overhead cost and related data for the two production departments follow.
Fabricating | Assembly | |||||
Direct labor hours | 210,000 | DLH | 290,000 | DLH | ||
Machine hours | 152,000 | MH | 124,000 | MH | ||
Overhead cost | $ | 390,000 | $ | 410,000 | ||
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.
3. Compute departmental overhead rates based on machine hours in the fabricating department and direct labor hours in the assembly department.
4. Use departmental overhead rates from requirement 3 to determine the total manufacturing cost per unit for the aluminum desk lamps.
Determine the plantwide overhead rate for Laval using direct labor hours as a base.
1. | |||||||||||||
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2.
Determine the total manufacturing cost per unit for the aluminum desk lamp using the plantwide overhead rate.
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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.)
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4.
Use departmental overhead rates from requirement 3 to determine the total manufacturing cost per unit for the aluminum desk lamps.
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