Anazi Leather Company manufactures leather handbags and moccasins. The company has been using the single plantwide factory overhead rate method but has decided to evaluate the multiple production department factory overhead rate method to allocate factory overhead. The factory overhead estimated per unit together with direct materials and direct labor will help determine selling prices. Handbags = 60,000 units, 3 hours of direct labor Moccasins = 40,000 units, 2 hours of direct labor Total budgeted factory overhead cost = $360,000 The company has two different production departments: Cutting and Sewing. The Cutting Department has a factory overhead budget of $80,000. Each unit will require 1 direct labor hour or a total of 100,000 direct labor hours. The Sewing Department estimates factory overhead in the amount of $280,000. Handbags require 2 hours of sewing time, and Moccasins require 1 hour for a total of 160,000 direct labor hours. Using the multiple production department factory overhead rate method, compute the total factory overhead to be allocated to each product using direct labor hours as the allocation base. Round interim calculations to two decimal places, if necessary. Line Item Description Amount Handbags $fill in the blank 1 Moccasins fill in the blank 2 Total Factory Overhead Allocation $fill in the blank 3
Anazi Leather Company manufactures leather handbags and moccasins. The company has been using the single plantwide factory
Handbags = 60,000 units, 3 hours of direct labor
Moccasins = 40,000 units, 2 hours of direct labor
Total budgeted
The company has two different production departments: Cutting and Sewing. The Cutting Department has a factory overhead budget of $80,000. Each unit will require 1 direct labor hour or a total of 100,000 direct labor hours.
The Sewing Department estimates factory overhead in the amount of $280,000. Handbags require 2 hours of sewing time, and Moccasins require 1 hour for a total of 160,000 direct labor hours.
Using the multiple production department factory overhead rate method, compute the total factory overhead to be allocated to each product using direct labor hours as the allocation base. Round interim calculations to two decimal places, if necessary.
| Line Item Description | Amount |
|---|---|
| Handbags | $fill in the blank 1 |
| Moccasins | fill in the blank 2 |
| Total Factory Overhead Allocation | $fill in the blank 3 |
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