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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 28,000 desk lamps produced annually follows. Direct materials $270,000 Direct labor Fabricating department (9,000 DLH $35 per DLH) Assembly department (15,800 DLH $26 per DLH) $315,000 $410,800 Machine hours Fabricating department Assembly department 15,200 MH 21,250 MH Expected overhead cost and related data for the two production departments follow. Direct labor hours Machine hours Overhead cost Fabricating 170,000 DLH Assembly 275,000 DLH 164,000 MH 125,000 MH $420,000 $445,000 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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