Exercise 4-9 (Algo) Allocating overhead using plantwide rate and departmental rates LO P1, P2

Laval produces lighting fixtures. Budgeted information for its two production departments follows. The departments use machine hours (MH) and direct labor hours (DLH).

	Fabricating		Assembly
Overhead cost	$ 1,280,000		$ 420,000
Direct labor hours	182,500	DLH	30,000	DLH
Machine hours	80,000	MH	73,500	MH

Laval reports the following for one of its products, a desk lamp.

	Number of Units	Fabricating Department				Assembly Department
		Direct Labor Hours per Unit		Machine Hours per Unit		Direct Labor Hours per Unit		Machine Hours per Unit
Desk lamp	5,000	5	DLH per unit	4	MH per unit	3	DLH per unit	0.5	MH per unit

Required: 1. Determine the plantwide overhead rate using 212,500 direct labor hours as the allocation base. 2. Determine the overhead cost per unit for the 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. Determine the overhead cost per unit for the desk lamp using the departmental overhead rates.

Complete this question by entering your answers in the tabs below.

Required 1

Required 2

Required 3

Required 4

Determine the plantwide overhead rate using 212,500 direct labor hours as the allocation base.

Required 1

Required 2

Required 3

Required 4

Determine the plantwide overhead rate using 212,500 direct labor hours as the allocation base.

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

Compute departmental overhead rates based on machine hours in the Fabricating department and direct labor hours in the Assembly department.

Determine the overhead cost per unit for the desk lamp using the departmental overhead rates.

Department	Departmental Overhead Rate		Hours per Unit	Overhead Cost per Unit
Fabricating
Assembly
Total