Question
Multiple Production Department Factory Overhead Rates Gwinnett County Chrome Company manufactures three chrome-plated productsautomobile bumpers,valve covers, and wheels. These products are manufactured in two production
Multiple Production Department Factory Overhead Rates
Gwinnett County Chrome Company manufactures three chrome-plated productsautomobile bumpers,valve covers, and wheels. These products are manufactured in two production departments (Stamping and Plating). The factory overhead for Gwinnett County Chrome is $239,200.
The three products consume both machine hours and direct labor hours in the two production departments as follows:
Direct Labor Hours | Machine Hours | ||||||
Stamping Department | |||||||
Automobile bumpers | 590 | 810 | |||||
Valve covers | 310 | 570 | |||||
Wheels | 350 | 620 | |||||
1,250 | 2,000 | ||||||
Plating Department | |||||||
Automobile bumpers | 195 | 1,150 | |||||
Valve covers | 200 | 700 | |||||
Wheels | 195 | 750 | |||||
590 | 2,600 | ||||||
Total | 1,840 | 4,600 |
The management of Gwinnett County Chrome Company now plans to use the multiple production department factory overhead rate method. The total factory overhead associated with each department is as follows:
Stamping Department | $120,000 |
Plating Department | 104,000 |
Total | $224,000 |
Required:
1. Determine the multiple production department factory overhead rates, using direct labor hours for the Stamping Department and machine hours for the Plating Department.
Stamping Department | $ per direct labor hour |
Plating Department | $ per machine hour |
2. Determine the product factory overhead costs, using the multiple production department rates in (1).
Automobile bumpers | Valve covers | Wheels | |||
Stamping Department | $ | $ | $ | ||
Plating Department | |||||
Total factory overhead | $ | $ | $ |
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