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Laval produces lamps and home lighting fixtures. Its most popular product is a brushed aluminum desk lamp. This lamp is made from components shaped
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 30,000 desk lamps produced annually follows. Direct materials Direct labor Fabricating department (5,500 DLH Assembly department (16,600 DLH Machine hours Fabricating department Assembly department $260,000 $23 per DLH) $24 per DLH) $126,500 $398,400 14,300 MH 21,150 MH Expected overhead cost and related data for the two production departments follow. Fabricating Assembly 200,000 DLH 370,000 DLH Direct labor hours Machine hours $330,000 Overhead cost 152,000 MH 121,000 MH $410,000 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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