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Exercise 17-8 Assigning overhead costs using the plantwide rate and departmental rates L.O. P1, P2 Lavor produces lamps and home lighting fixtures. Its most popular
Exercise 17-8 Assigning overhead costs using the plantwide rate and departmental rates L.O. P1, P2 Lavor 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 its implementation department. Information related to the 35,000 desk lamps produced annually follow. Direct materials $ 280,000 Direct labor Fabricating department (7,000 DLH $20 per DLH) $ 140,000 Implementation department (16,000 DLH $29 per DLH) $ 464,000 Machine hours Fabricating department 15,040 MH Implementation department 21,000 MH -------------------------------------------------------------------------------- Expected overhead cost and related data for the two production departments follow. Fabricating Implementation Direct labor hours 75,000 DLH 125,000 DLH Machine hours 80,000 MH 62,500 MH Overhead cost $ 300,000 $ 200,000 -------------------------------------------------------------------------------- Required 1. Determine the plantwide overhead rate for Lavor using direct labor hours as a base. (Round your answer to 2 decimal places. Omit the "$" sign in your response.) Plantwide overhead rate $ /DLH 2. Determine the total manufacturing cost per unit for the aluminum desk lamp using the plantwide overhead rate. (Round your answer to 2 decimal places. Omit the "$" sign in your response.) Total manufacturing cost $ /unit 3. Compute departmental overhead rates based on machine hours in the fabricating department and direct labor hours in the implementation department. (Round your answers to 2 decimal places. Omit the "$" sign in your response.) Departmental overhead rate Fabricating $ /MH Implementation $ /DLH -------------------------------------------------------------------------------- 4. Use departmental overhead rates from requirement 3 to determine the total manufacturing cost per unit for the aluminum desk lamps. (Round your answer to 2 decimal places. Omit the "$" sign in your response.) Total manufacturing cost $ /unit
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