Laval produces lighting fixtures. Budgeted information for its two production departments follows. The departments use machine hc (MH) and direct labor hours (DLH). Overhead cost Direct labor hours Machine hours Fabricating $ 560,000 Desk lamp Assembly $ 60,000 10,000 DLH 63,500 MH 52,800 DLH 70,000 MH Laval reports the following for one of its products, a desk lamp Fabricating Department Assembly Department Number of Direct Labor Hours per Machine Hours per Direct Labor Hours per Machine Hours per Unit Units Unit 3,000 5 DLH per unit 1 DLH per unit Unit 2 MH per unit Unit 8.5MH per unit Required: 1. Determine the plantwide overhead rate using 62,000 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 lamo using the departmental overhead rates.

Laval produces lighting fixtures. Budgeted information for its two production departments follows. The departments use machine hc (MH) and direct labor hours (DLH). Overhead cost Direct labor hours Machine hours Fabricating $ 560,000 Desk lamp Assembly $ 60,000 10,000 DLH 63,500 MH 52,800 DLH 70,000 MH Laval reports the following for one of its products, a desk lamp Fabricating Department Assembly Department Number of Direct Labor Hours per Machine Hours per Direct Labor Hours per Machine Hours per Unit Units Unit 3,000 5 DLH per unit 1 DLH per unit Unit 2 MH per unit Unit 8.5MH per unit Required: 1. Determine the plantwide overhead rate using 62,000 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 lamo using the departmental overhead rates.

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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