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Multiple Production Department Factory Overhead Rate Method Home & Farm Glove Company produces three types of high performance sports gloves: small, medium, and large. A
Multiple Production Department Factory Overhead Rate Method Home & Farm Glove Company produces three types of high performance 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 final glove is cut and sewed together. Home & Farm 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 $107,100 Cut and Sew Department overhead 176,800 Total $283,900 The direct labor estimated for each production department was as follows: Pattern Department 2,100 direct labor hours Cut and Sew Department 2,600 Total 4,700 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 Small Glove Medium Glove Large Glove Pattern Department 0.05 0.06 0.07 Cut and Sew Department 0.09 0.11 0.13 Direct labor hours per unit 0.14 0.17 0.20 If required, round all per unit answers to the nearest cent. a. Determine the two production department factory overhead rates. b. Use the two production department factory overhead rates to determine the factory overhead per unit for each product.
Multiple Production Department Factory Overhead Rate Method
Home & Farm Glove Company produces three types of high performance 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 final glove is cut and sewed together. Home & Farm 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 $107,100
Cut and Sew Department overhead 176,800
Total $283,900
The direct labor estimated for each production department was as follows:
Pattern Department 2,100 direct labor hours
Cut and Sew Department 2,600
Total 4,700 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 Small Glove Medium Glove Large Glove
Pattern Department 0.05 0.06 0.07
Cut and Sew Department 0.09 0.11 0.13
Direct labor hours per unit 0.14 0.17 0.20
If required, round all per unit answers to the nearest cent.
a. Determine the two production department factory overhead rates.
b. Use the two production department factory overhead rates to determine the factory overhead per unit for each product.
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