Exercise 04-10 Assigning overhead costs using the plantwide rate and departmental rate methods LO P1, P2 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 23,000 desk lamps produced annually follows. Direct materials $ 270,000 Direct labor Fabricating department (6,000 DLH $25 per DLH) $ 150,000 Assembly department (16,600 DLH $30 per DLH) $ 498,000 Machine hours Fabricating department 14,500 MH Assembly department 20,700 MH Expected overhead cost and related data for the two production departments follow. Fabricating Assembly Direct labor hours 130,000 DLH 330,000 DLH Machine hours 158,000 MH 135,000 MH Overhead cost $ 380,000 $ 445,000 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.

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• Required 1
• Required 2
• Required 3
• Required 4

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

Estimated overhead costs		0	per direct labor hour
Estimated direct labor hours

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• Required 1
• Required 2
• Required 3
• Required 4

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

Direct Labor - Assembly
Direct Labor - Fabricating
Direct materials
Overhead
Total manufacturing costs	0
Units produced
Manufacturing cost per unit

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• Required 1
• Required 2
• Required 3
• Required 4

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

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• Required 1
• Required 2
• Required 3
• Required 4

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

Direct labor
		0
Overhead
		0
		$0
		0	per unit