**Seat Belt Inc. Production Overview**Seat Belt Inc. is involved in the production of three sizes of seat belts: small, medium, and large. The manufacturing process comprises two key departments:1. **Pattern Department**: - Initial step where seat belt patterns are stenciled onto fabric.2. **Cut and Sew Department**: - Follows the patterning process where the fabric is cut and sewn into final seat belts.**Overhead Cost Allocation**Seat Belt Inc. employs a multiple production department factory overhead rate method for the allocation of factory overhead costs. The budgeted factory overhead costs are distributed as follows:- **Pattern Department**: - Overhead: $300,000 - Direct Labor Hours (dlh): 40,000- **Cut and Sew Department**: - Overhead: $600,000 - Direct Labor Hours (dlh): 60,000- **Total Factory Overhead**: - $900,000 - Total Direct Labor Hours: 100,000The company applies the Multiple Department Overhead method, utilizing Direct Labor Hours to allocate overhead. **Direct Labor Hours Per Unit by Seat Belt Size:**- **Small**: - Pattern Department: 1.0 dlh - Cut and Sew Department: 1.5 dlh - Total Per Unit: 2.5 dlh- **Medium**: - Pattern Department: 1.5 dlh - Cut and Sew Department: 2.5 dlh - Total Per Unit: 4.0 dlh- **Large**: - Pattern Department: 2.0 dlh - Cut and Sew Department: 3.0 dlh - Total Per Unit: 5.0 dlh**Part I: Calculation Task**The task involves calculating the Departmental Factory Overhead Rate for each department:- Calculate the overhead rate by dividing the department’s total overhead cost by its total direct labor hours.This detailed data assists in planning and optimizing manufacturing expenses, improving cost-efficiency, and ensuring streamlined production operations. **Calculate the Total Factory Overhead Per Unit for Each Product:**- **Small:**- **Medium:**- **Large:** This exercise prompt requires you to determine the factory overhead costs associated with producing different-sized products: Small, Medium, and Large. To complete this task, consider the allocation of overhead costs such as utilities, rent, and maintenance based on the production capacity or volume of each product type. Calculations may involve dividing the total overhead costs by the number of units produced in each category to determine the cost per unit.

Answer) Calculation of departmental factory overheads rate for Pattern Department Factory overhead…

Answered: 24: Seat Belt Inc., produces three…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Activity-Based Costing Cardio Care Inc. manufactures stationary bicycles and treadmills. The products are produced in the Fabrication and Assembly production departments. In addition to production activities, several other activities are required to produce the two products. These activities and their associated activity rates are as follows: Activity Activity Rate Fabrication $22 per machine hour (mh) Assembly $14 per direct labor hour (dlh) Setup $40 per setup Inspecting $20 per inspection Production scheduling $16 per production order Purchasing $4 per purchase order The activity-base usage quantities and units produced for each product were as follows: Stationary Bicycle Treadmill Machine hours 2,210 1,090 Direct labor hours 470 200 Setups 40 10 Inspections 650 370 Production orders 60 40 Purchase orders 150 80 Units produced 1,000 1,000 Use the activity rate and usage information to compute the total…
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Multiple Production Department Factory Overhead Rate Method Performance Gloves, 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. Performance Gloves uses the multiple production department factory overhead rate method of allocating factory overhead costs. Its factory overhead costs were budgeted as follows: Pattern Department overhead $135,000 Cut and Sew Department overhead 223,200 Total $358,200 The direct labor estimated for each production department was as follows: Pattern Department 2,500 direct labor hours Cut and Sew Department 3,100 Total 5,600 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…

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