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 as follows: Pattern Department overhead Cut and Sew Department overhead Total The direct labor estimated for each production department was as follows: Pattern Department 1,800 direct labor hours Cut and Sew Department 2,300 Total 4,100 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 Pattern Department Cut and Sew Department Direct labor hours per unit $118,800 202,400 $321,200 Small Glove Medium Glove Large Glove 0.04 0.07 0.11 0.05 0.09 0.14 0.06 0.11 0.17

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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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 as follows:
Pattern Department overhead
Cut and Sew Department overhead
Total
$118,800
202,400
$321,200
The direct labor estimated for each production department was as follows:
Pattern Department
1,800 direct labor hours
Cut and Sew Department
2,300
Total
4,100 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
Pattern Department
Cut and Sew Department
Direct labor hours per unit
Small Glove Medium Glove
0.04
0.07
0.11
0.05
0.09
0.14
Large Glove
0.06
0.11
0.17
Transcribed Image Text: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 as follows: Pattern Department overhead Cut and Sew Department overhead Total $118,800 202,400 $321,200 The direct labor estimated for each production department was as follows: Pattern Department 1,800 direct labor hours Cut and Sew Department 2,300 Total 4,100 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 Pattern Department Cut and Sew Department Direct labor hours per unit Small Glove Medium Glove 0.04 0.07 0.11 0.05 0.09 0.14 Large Glove 0.06 0.11 0.17
If required, round all per unit answers to the nearest cent.
a. Determine the two production department factory overhead rates.
Pattern Department
per dlh
Cut and Sew Department
per dlh
b. Use the two production department factory overhead rates to determine the factory overhead
per unit for each product.
Small glove
Medium glove
Large glove
LA
per unit
per unit
per unit
Transcribed Image Text:If required, round all per unit answers to the nearest cent. a. Determine the two production department factory overhead rates. Pattern Department per dlh Cut and Sew Department per dlh b. Use the two production department factory overhead rates to determine the factory overhead per unit for each product. Small glove Medium glove Large glove LA per unit per unit per unit
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