Question
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 its implementation department. Information related to the 27,000 desk lamps produced annually follow.
Direct materials $ 270,000
Direct labor
Fabricating department (6,000 DLH $21 per DLH) $126,000
Implementation department (16,600 DLH $27 per DLH) $ 448,200
Machine hours
Fabricating department 14,900 MH
Implementation department 21,100 MH
Expected overhead cost and related data for the two production departments follow.
Fabricating Implementation
Direct labor hours 140,000 DLH 315,000 DLH
Machine hours 152,000 MH 126,000 MH
Overhead cost $ 360,000 $ 450,000
Required 1. Determine the plantwide overhead rate for Laval using direct labor hours as a base.
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