Question
Spring Meadow Dairy Company manufactures three products - whole milk, skim milk, and cream - in two production departments, Blending and Packing. The factory overhead
Spring Meadow Dairy Company manufactures three products - whole milk, skim milk, and cream - in two production departments, Blending and Packing. The factory overhead for Spring Meadow Dairy is $270,000. The three products consume both machine hours and direct labor hours in the two production department as follows:
Blending Department Direct Labor Hours Machine Hours
Whole Milk 270 790
Skim Milk 290 720
Cream 240 290
800 (total) 1,800 (total)
Packing Department
Whole Milk 330 460
Skim Milk 520 560
Cream 150 180
1,100 (total) 1,200 (total)
Instructions:
1. Determine the single plantwide factory overhead rate, using each of the following allocation bases: a)direct labor and b)machine hours.
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.
Spring Meadow Dairy Company manufactures three products - whole milk, skim milk, and cream - in two production departments, Blending and Packing. The factory overhead for Spring Meadow Dairy is $270,000. The three products consume both machine hours and direct labor hours in the two production department as follows: Blending Department Direct Labor Hours Machine Hou Instructions: Determine the single plantwide factory overhead rate, using each of the following allocation bases: a)direct labor and b)machine hours. Determine the product factory overhead costs, using a)the direct labor hour plantwide factory overhead rate and b)the machine hour plantwide factory overhead rateStep by Step Solution
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