Exercise 4-9 (Algo) Allocating overhead using plantwide rate and departmental rates LO P1, P2 Laval produces lighting fixtures. Budgeted information for its two production departments follows. The departments use machine hours (MH) and direct labor hours (DLH). Fabricating. $ 528,000 209,000 DLH 66,000 MH Laval reports the following for one of its products, a desk lamp. Fabricating Department Overhead cost Direct labor hours Machine hours Desk Lamp Required 1 Required 2 Units 4,000 Required: 1. Determine the plantwide overhead rate using 231,000 direct labor hours as the allocation base. 2. Determine the overhead cost per unit for the desk lamp using the plantwide overhead rate. 3. Compute departmental overhead rates based on machine hours in the Fabricating department and direct labor hours in the Assembly department. 4. Determine the overhead cost per unit for the desk lamp using the departmental overhead rates. Number of Direct Labor Hours per Unit 5 DLH per unit Complete this question by entering your answers in the tabs below. Desk lamp Assembly $ 396,000 Required 1 Determine the plantwide overhead rate using 231,000 direct labor hours as the allocation base. Required 1 Required 2 Required 3. 22,000 DLH 69,500 MH Required 1 Machine Hours per Unit 4 MH per unit Required 3 Required 4 Complete this question by entering your answers in the tabs below. Required 2 Department = Fabricating Assembly Total Determine the overhead cost per unit for the desk lamp using the plantwide overhead rate. Required 1 Required 4 Required 2 Plantwide Overhead Rate Complete this question by entering your answers in the tabs below. Assembly Department Direct Labor Hours Machine Hours per per Unit Unit 3 DLH per unit 0.3 MH per unit Required 2 > < Required 1 Required 3 Required 4 What is the departmental overhead rate for the Assembly Department? Compute departmental overhead rates based on machine hours in the Fabricating department and direct labor hours in the Assembly department. What is the departmental overhead rate for the Fabricating Department? Required 2 Required 4 > Complete this question by entering your answers in the tabs below. Hours Used Required 3 Required 4 Departmental Overhead Rate Required 3 Required 3 Determine the overhead cost per unit for the desk lamp using the departmental overhead rates. Overhead Cost per Unit > Hours per Unit Overhead Cost per Unit Required 4 >

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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**Exercise 4-9 (Algo) Allocating Overhead Using Plantwide Rate and Departmental Rates LO P1, P2**

Laval produces lighting fixtures. Budgeted information for its two production departments follows. The departments use machine hours (MH) and direct labor hours (DLH).

**Overhead Costs:**
- Fabricating: $528,000
- Assembly: $396,000

**Direct Labor and Machine Hours:**
- Fabricating: 209,000 DLH, 66,000 MH
- Assembly: 22,000 DLH, 69,500 MH

**Product Information (Desk Lamp):**
- Number of Units: 4,000
- Fabricating Department: 5 DLH per unit, 4 MH per unit
- Assembly Department: 3 DLH per unit, 0.3 MH per unit

**Required Tasks:**

1. **Determine the Plantwide Overhead Rate:**
   Use 231,000 direct labor hours as the allocation base to calculate the plantwide overhead rate.

2. **Overhead Cost Per Unit Using Plantwide Rate:**
   Calculate the overhead cost per unit for the desk lamp using the plantwide overhead rate.

3. **Departmental Overhead Rates:**
   Compute rates based on:
   - Machine hours in the Fabricating department
   - Direct labor hours in the Assembly department

4. **Overhead Cost Per Unit Using Departmental Rates:**
   Determine the overhead cost per unit for the desk lamp using the departmental overhead rates.

**Input Sections for Students:**

- **Plantwide Overhead Rate Calculation:**
  Students will enter their calculations to determine the plantwide overhead rate and related costs.

- **Overhead Cost Using Plantwide Rate:**
  A table where students input the plantwide overhead rate, hours used, and resulting cost.

- **Departmental Overhead Rates:**
  Sections for calculating overhead rates for both the Fabricating and Assembly departments.

- **Cost Per Unit Using Departmental Rates:**
  A table where students input departmental rates, hours per unit, and calculate overhead per unit, producing a total.

*Note: Each task above is linked to interactive tabs labeled "Required 1" through "Required 4," where students input their answers.*
Transcribed Image Text:**Exercise 4-9 (Algo) Allocating Overhead Using Plantwide Rate and Departmental Rates LO P1, P2** Laval produces lighting fixtures. Budgeted information for its two production departments follows. The departments use machine hours (MH) and direct labor hours (DLH). **Overhead Costs:** - Fabricating: $528,000 - Assembly: $396,000 **Direct Labor and Machine Hours:** - Fabricating: 209,000 DLH, 66,000 MH - Assembly: 22,000 DLH, 69,500 MH **Product Information (Desk Lamp):** - Number of Units: 4,000 - Fabricating Department: 5 DLH per unit, 4 MH per unit - Assembly Department: 3 DLH per unit, 0.3 MH per unit **Required Tasks:** 1. **Determine the Plantwide Overhead Rate:** Use 231,000 direct labor hours as the allocation base to calculate the plantwide overhead rate. 2. **Overhead Cost Per Unit Using Plantwide Rate:** Calculate the overhead cost per unit for the desk lamp using the plantwide overhead rate. 3. **Departmental Overhead Rates:** Compute rates based on: - Machine hours in the Fabricating department - Direct labor hours in the Assembly department 4. **Overhead Cost Per Unit Using Departmental Rates:** Determine the overhead cost per unit for the desk lamp using the departmental overhead rates. **Input Sections for Students:** - **Plantwide Overhead Rate Calculation:** Students will enter their calculations to determine the plantwide overhead rate and related costs. - **Overhead Cost Using Plantwide Rate:** A table where students input the plantwide overhead rate, hours used, and resulting cost. - **Departmental Overhead Rates:** Sections for calculating overhead rates for both the Fabricating and Assembly departments. - **Cost Per Unit Using Departmental Rates:** A table where students input departmental rates, hours per unit, and calculate overhead per unit, producing a total. *Note: Each task above is linked to interactive tabs labeled "Required 1" through "Required 4," where students input their answers.*
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