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 $142,000   Cut and Sew Department overhead 235,000     Total $377,000   The direct labor estimated for each production department was as follows: Pattern Department 2,000 direct labor hours Cut and Sew Department 2,500     Total 4,500 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 Small Glove Medium Glove Large Glove Pattern Department 0.04   0.05   0.06   Cut and Sew Department 0.08   0.10   0.12   Direct labor hours per unit 0.12   0.15   0.18   If required, round all per unit answers to the nearest cent. a. Determine the two production department factory overhead rates. Pattern Department $fill in the blank 1per dlh Cut and Sew Department $fill in the blank 2per dlh b. Use the two production department factory overhead rates to determine the factory overhead per unit for each product. Small glove $fill in the blank 3 per unit Medium glove $fill in the blank 4 per unit Large glove $fill in the blank 5 per unit

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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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 $142,000  
Cut and Sew Department overhead 235,000  
  Total $377,000  

The direct labor estimated for each production department was as follows:

Pattern Department 2,000 direct labor hours
Cut and Sew Department 2,500  
  Total 4,500 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 Small Glove Medium Glove Large Glove
Pattern Department 0.04   0.05   0.06  
Cut and Sew Department 0.08   0.10   0.12  
Direct labor hours per unit 0.12   0.15   0.18  

If required, round all per unit answers to the nearest cent.

a. Determine the two production department factory overhead rates.

Pattern Department $fill in the blank 1per dlh
Cut and Sew Department $fill in the blank 2per dlh

b. Use the two production department factory overhead rates to determine the factory overhead per unit for each product.

Small glove $fill in the blank 3 per unit
Medium glove $fill in the blank 4 per unit
Large glove $fill in the blank 5 per unit

 

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