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Multiple Production Department Factory Overhead Rates Spotted Cow Dairy Company manufactures three products-whole milk, skim milk, and cream-in two production departments, Blending and Packing. The
Multiple Production Department Factory Overhead Rates Spotted Cow Dairy Company manufactures three products-whole milk, skim milk, and cream-in two production departments, Blending and Packing. The factory overhead for Spotted Cow Dairy is $330,000. The three products consume both machine hours and direct labor hours in the two production departments as follows: Direct Labor Hours Machine Hours Blending Department Whole milk Skim milk 710 450 340 960 770 610 2,340 Cream 1,450 Packing Department Whole milk Skim milk Cream 890 220 200 960 530 3,300 Total 2,130 5,640 The management of Spotted Cow Dairy Company now plans to use the multiple production department factory overhead rate method. The total factory overhead associated with each department is as follows: Blending Department Packing Department $165,000 165,000 $330,000 Total Required: If required, round all amounts to the nearest dollar. 1. Determine the multiple production department factory overhead rales, using direct labor hours for the Blending Department and machine hours for the Packing Department. Blending Department per direct labor hour Packing Department per machine hour 2. Determine the product factory overhead costs, using the multiple production department rates in (1). Whole milk Skim milk Cream Blending Department factory overhead Packing Department factory overhead Total factory overhead O O O
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