1. 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 Hours			Machine Hours
   Blending Department
   Whole milk			260			650
   Skim milk			245			710
   Cream			215			260
   			720			1,620
   Packing Department
   Whole milk			470			500
   Skim milk			300			415
   Cream			130			165
   			900			1,080
   	Total		1,620			2,700

   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	$178,200
   Packing Department	121,500
   Total	$299,700

   Required:

   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 hour
   Packing Department	$ per direct labor 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	$		$		$

Check My Work