Laval produces lighting fixtures. Budgeted information for its two production departments follows. The departments use machine hours (MH) and direct labor hours (DLH). $ 1,330,000 Fabricating Assembly $ 480,000 Overhead cost Direct labor hours Machine hours 412,500 DLH 40,000 DLH 95,000 MH 78,500 MH Laval reports the following for one of its products, a desk lamp. Fabricating Department Assembly Department Direct Labor Hours per Unit Machine Hours per Unit Machine Hours per Unit Direct Labor Number Hours per Unit of Units DLH per 4 unit Мн рer 2 unit DLH per unit Мн рer 0.5 unit Desk 6,000 lamp Required: 1. Determine the plantwide overhead rate using 452,500 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.
Laval produces lighting fixtures. Budgeted information for its two production departments follows. The departments use machine hours (MH) and direct labor hours (DLH). $ 1,330,000 Fabricating Assembly $ 480,000 Overhead cost Direct labor hours Machine hours 412,500 DLH 40,000 DLH 95,000 MH 78,500 MH Laval reports the following for one of its products, a desk lamp. Fabricating Department Assembly Department Direct Labor Hours per Unit Machine Hours per Unit Machine Hours per Unit Direct Labor Number Hours per Unit of Units DLH per 4 unit Мн рer 2 unit DLH per unit Мн рer 0.5 unit Desk 6,000 lamp Required: 1. Determine the plantwide overhead rate using 452,500 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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