Question
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
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 $294,000. 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 290 950 Skim milk 320 870 Cream 250 350 860 2,170 Packing Department Whole milk 410 510 Skim milk 640 630 Cream 190 190 1,240 1,330 Total 2,100 3,500 Required: 1. Determine the single plantwide factory overhead rate, using each of the following allocation bases: (a) direct labor hours and (b) machine hours. If required, round all amounts to the nearest dollar. a. Direct labor overhead rate $ per direct labor hour b. Machine hour overhead rate $ per machine hour 2. Determine the product factory overhead costs, using (a) the direct labor hour plantwide factory overhead rate and (b) the machine hour plantwide factory overhead rate. Whole Milk Skim Milk Cream Direct labor hours $ $ $ Machine hours $ $ $
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