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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 $396,500. The three products consume both machine hours and direct labor hours in the two production departments as follows: Direct Labor Machine Hours Hours Blending Department Whole milk Skim milk 560 770 360 620 Cream 280 480 1,200 1,870 Packing Department Whole milk Skim milk Cream 170 180 1,100 680 155 720 505 2,500 4,370 Total 1,705 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: $204,000 Blending Department Packing Department 192,500 Total $396,500 Required: If required, round all amounts to the nearest dollar. If required, round all amounts to the nearest dollar. 1. Determine the multiple production department factory overhead rates, using direct labor hours for the Blending Department and machine hours for the Packing Department. Blending $ 170 per direct labor Department hour Packing Department $ 77 per machine hour 2. Determine the product factory overhead costs, using the multiple production department rates in (1). Whole Skim Cream milk milk Blending Department factory overhead Packing Department factory overhead Total factory overhead
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