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Exercise 4-9 (Static) Allocating overhead using plantwide rate and departmental rates LO P1, P Laval produces lighting fixtures. Budgeted information for its two production

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Exercise 4-9 (Static) Allocating overhead using plantwide rate and departmental rates LO P1, P Laval produces lighting fixtures. Budgeted information for its two production departments follows. The departments use me hours (MH) and direct labor hours (DLH). Overhead cost Direct labor hours Machine hours Fabricating $ 300,000 75,000 DLH 80,000 MH Assembly $ 200,000 125,000 DLH 62,500 MH Laval reports the following for one of its products, a desk lamp. Fabricating Department Assembly Department Number of Direct Labor Hours per Machine Hours per direct Labor Hours per Machine Hours per Desk lamp Required: Units 4,000 Unit 4 DLH per unit Unit 3 MH per unit Unit 2 DLH per unit Unit 0.5 MH per unit 1. Determine the plantwide overhead rate using 200,000 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.

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