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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

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 15,000MH
Assembly department 20,450MH
 

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

 FabricatingAssembly
Direct labor hours 210,000DLH 290,000DLH
Machine hours 152,000MH 124,000MH
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.
 
 
Estimated overhead costs$800,000$1.60per direct labor hour
Estimated direct labor hours500,000

 

 

2.

Determine the total manufacturing cost per unit for the aluminum desk lamp using the plantwide overhead rate.

  
 
 
  
Direct Labor - Assembly$188,500
Direct Labor - Fabricating395,200
Direct materials270,000
Overhead34,720
  
Total manufacturing costs888,420
Units produced 

Manufacturing cost per unit

 

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.)

  
 
 
 Departmental overhead rate 
Fabricating MH
Assembly DLH

 

4.

Use departmental overhead rates from requirement 3 to determine the total manufacturing cost per unit for the aluminum desk lamps.

  
 
 
    
Direct materials   
Direct labor  
Fabricating  
Assembly  
   
  0
Overhead  
Fabricating  
Assembly  
   
  0
  $0
Units produced  
Manufacturing cost per unit 0per unit

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