Multiple
Production
Department
Factory
Overhead
Rate
Method
Handy
Leather,
Inc.,
produces
three
sizes
of
sports
gloves:
small,
medium,
and
large.
A
glove
pattern
is
first
stenciled
onto
leather
in
the
Pattern
Department.
The
stenciled
patterns
are
then
sent
to
the
Cut
and
Sew
Department,
where
the
glove
is
cut
and
sewed
together.
Handy
Leather
uses
the
multiple
production
department
factory
overhead
rate
method
of
allocating
factory
overhead
costs.
Its
factory
overhead
costs
were
budgeted
a:
follows:
Pattern
Department
overhead
$100,700
Cut
and
Sew
Department
overhead
168,000
Total
$268,700
The
direct
labor
estimated
for
each
production
department
was
as
follows:
Pattern
Department
1,900
direct
labor
hours
Cut
and
Sew
Department
2,400
Total
4,300
direct
labor
hours
Direct labor
hours
are
used
to
allocate
the
production
department
overhead
to
the
products.
The
direct
labor
hours
per
unit
for
each
product
for
each
production
department
were
obtained
from
the
engineering
records
as
follows:
Production
Departments
Small Glove
Medium
Glove
Large
Glove
Pattern
Department
0.04
0.05
0.06
Cut
and
Sew
Department
0.08
0.10
0.12
Direct
labor
hours
per
unit
0.12
0.15
0.18
If
required,
round
all
per
unit
answers
to
the
nearest
cent.
a.
Determine
the
two
production
department
factory
overhead
rates.
Pattern
Department
@
v
per
dih
Cut
and
Sew
Department
v
per
dlh
b.
Use
the
two
production
department
factory
overhead
rates
to
determine
the
factory
overhead
per
unit
for
each product.
Small
glove
v
per
unit
Medium
glove
v
per
unit
Large
glove
v
per
unit
