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$127,600Cut and Sew Department overhead215,600Total$343,200

The direct labor estimated for each production department was as follows:

Pattern Department2,200direct labor hoursCut and Sew Department2,800Total5,000direct 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 DepartmentsSmall GloveMedium GloveLarge GlovePattern Department0.050.060.07Cut and Sew Department0.070.090.11Direct labor hours per unit0.120.150.18

If required, round all per unit answers to the nearest cent.

a.Determine the twoproduction department factory overhead rates.

Pattern Department$fill in the blank 1

per dlhCut and Sew Department$fill in the blank 2

per dlh

b.Use the two production department factory overhead rates to determine the factory overhead per unit for each product.

Small glove$fill in the blank 3

per unitMedium glove$fill in the blank 4

per unitLarge glove$fill in the blank 5

per unit