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 $299,700.

The three products consume both machine hours and direct labor hours in the two production departments as follows:

Direct Labor HoursMachine HoursBlending DepartmentWhole milk260650Skim milk245710Cream2152607201,620Packing DepartmentWhole milk470500Skim milk300415Cream1301659001,080Total1,6202,700The management of Spotted Cow Dairy Company now plans to use themultiple production department factory overhead rate method. The total factory overhead associated with each department is as follows:

Blending Department$178,200Packing Department121,500Total$299,700Required:

1.Determine the multiple production department factory overhead rates, using machine hours for the Blending Department and direct labor hours for the Packing Department.

Blending Department$per machine hourPacking Department$per direct labor hour

2.Determine the product factory overhead costs, using the multiple production department rates in (1).

Whole MilkSkim MilkCreamBlending Department factory overhead$$$Packing Department factory overheadTotal factory overhead$$$