Multiple Production Department Factory Overhead Rates

Spotted Cow Dairy Company manufactures three productswhole milk, skim milk, and creamin two production departments, Blending and Packing. The factory overhead for Spotted Cow Dairy is $265,000.

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 610 830

Skim milk 390 670

Cream 300 530

1,300 2,030

Packing Department

Whole milk 180 1,320

Skim milk 190 810

Cream 175 870

545 3,000

Total 1,845 5,030

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 $130,000

Packing Department 135,000

Total $265,000

Required:

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 Department $fill in the blank 1 per direct labor hour

Packing Department $fill in the blank 2 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 $fill in the blank 3 $fill in the blank 4 $fill in the blank 5

Packing Department factory overhead fill in the blank 6 fill in the blank 7 fill in the blank 8

Total factory overhead