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Multiple Production Department Factory Overhead Rate Method Handy Leather, Inc., produces three sizes of sports gloves: small, medium, and large. A glove pattern is first
Multiple Production Department Factory Overhead Rate Method Handy Leather, Inc., produces three sizes of sports gloves: small, medium, and large. A glove pattern is first stenciled onto leather in the Pattern Department. The stenciled patterns are then sent to the Cut and Sew Department, where the glove is cut and sewed together. Handy Leather uses the multiple production department factory overhead rate method of allocating factory overhead costs. Its factory overhead costs were budgeted as follows: Pattern Department overhead Cut and Sew Department overhead Total $175,000 288,300 $463,300 The direct labor estimated for each production department was as follows: Pattern Department Cut and Sew Department Total 2,500 direct labor hours 3,100 5,600 direct labor hours Direct labor hours are used to allocate the production department overhead to the products. The direct labor hours per unit for each product for each production department were obtained from the engineering records as follows: Production Departments Pattern Department Small Glove Medium Glove Large Glove 0.05 0.06 0.07 Cut and Sew Department 0.07 0.09 0.11 Direct labor hours per unit 0.12 0.15 0.18 If required, round all per unit answers to the nearest cent. a. Determine the two production department factory overhead rates. Pattern Department $ Cut and Sew Department $ per dlh per dlh b. Use the two production department factory overhead rates to determine the factory overhead per unit for each product. Small glove $ Medium glove Large glove per unit per unit per unit Activity-Based Costing: Factory Overhead Costs The total factory overhead for Bardot Marine Company is budgeted for the year at $607,200, divided into four activities: fabrication, $294,000; assembly, $120,000; setup, $103,950; and inspection, $89,250. Bardot Marine manufactures two types of boats: speedboats and bass boats. The activity-base usage quantities for each product by each activity are as follows: Fabrication Speedboat 5,250 dlh Assembly 15,000 dlh Setup Inspection 38 setups 66 inspections Bass boat 15,750 5,000 277 459 21,000 dlh 20,000 dlh 315 setups 525 inspections Each product is budgeted for 5,000 units of production for the year. Determine the activity rates for each activity. Fabrication $ per direct labor hour Assembly $ per direct labor hour Setup $ per setup Inspection $ per inspection b. Determine the activity-based factory overhead per unit for each product. Round to the nearest whole dollar. Speedboat per unit Bass boat per unit
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