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Blair Designs plans to allocate factory overhead based upon a departmental rate for the Sewing and Packaging Departments. The company expects to incur total overhead costs of $46,000, of which management expects 75% to be incurred by the Sewing Department and 25% to be incurred by the Packaging Department. Blair makes two products: Solid and Print. Use the following information for problems 6 and 7. Solid Print Sewing (direct labor hours) 2,825 5,800 Packaging (machine hours) 900 1,100 6. Calculate the departmental overhead rates. 7. Calculate the factory overhead to be allocated to each product line.

Blair Designs plans to allocate factory overhead based upon a departmental rate for the Sewing and Packaging Departments. The company expects to incur total overhead costs of $46,000, of which management expects 75% to be incurred by the Sewing Department and 25% to be incurred by the Packaging Department. Blair makes two products: Solid and Print. Use the following information for problems 6 and 7. Solid Print Sewing (direct labor hours) 2,825 5,800 Packaging (machine hours) 900 1,100 6. Calculate the departmental overhead rates. 7. Calculate the factory overhead to be allocated to each product line.

FINANCIAL ACCOUNTING
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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Answer 6 and 7 with work

Hulsey Coffee Co. allocates factory overhead using a single plantwide overhead rate based on direct labor hours. The company estimates that direct labor costs will be $144,000 and factory overhead costs will be $84,000. Employees are paid $12.00 an hour. To produce the 6,500 units of the Standard Coffee, the company requires 5,000 direct labor hours, while 11,000 units of Deluxe Coffee requires 10,400 direct labor hours. 1. Calculate the plantwide overhead rate. 2. Determine the factory overhead allocated to Standard Coffee. 3. Determine the factory overhead allocated to Deluxe Coffee. 4. Determine the per unit factory overhead to allocate to Standard Coffee. 5. Determine the per unit factory overhead to allocate to Deluxe Coffee. Blair Designs plans to allocate factory overhead based upon a departmental rate for the Sewing and Packaging Departments. The company expects to incur total overhead costs of $46,000, of which management expects 75% to be incurred by the Sewing Department and 25% to be incurred by the Packaging Department. Blair makes two products: Solid and Print. Use the following information for problems 6 and 7. Solid Print Sewing (direct labor hours) 2,825 5,800 Packaging (machine hours) 900 1,100 6. Calculate the departmental overhead rates. 7. Calculate the factory overhead to be allocated to each product line.
Transcribed Image Text:Hulsey Coffee Co. allocates factory overhead using a single plantwide overhead rate based on direct labor hours. The company estimates that direct labor costs will be $144,000 and factory overhead costs will be $84,000. Employees are paid $12.00 an hour. To produce the 6,500 units of the Standard Coffee, the company requires 5,000 direct labor hours, while 11,000 units of Deluxe Coffee requires 10,400 direct labor hours. 1. Calculate the plantwide overhead rate. 2. Determine the factory overhead allocated to Standard Coffee. 3. Determine the factory overhead allocated to Deluxe Coffee. 4. Determine the per unit factory overhead to allocate to Standard Coffee. 5. Determine the per unit factory overhead to allocate to Deluxe Coffee. Blair Designs plans to allocate factory overhead based upon a departmental rate for the Sewing and Packaging Departments. The company expects to incur total overhead costs of $46,000, of which management expects 75% to be incurred by the Sewing Department and 25% to be incurred by the Packaging Department. Blair makes two products: Solid and Print. Use the following information for problems 6 and 7. Solid Print Sewing (direct labor hours) 2,825 5,800 Packaging (machine hours) 900 1,100 6. Calculate the departmental overhead rates. 7. Calculate the factory overhead to be allocated to each product line.
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