(4) ABC: Multiple Production Department Factory Overhead Rate MethodHandy 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 andSew 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 overheadcosts were budgeted as follows:Pattern Department overhead$88,200Cut and Sew Department overhead149,500Total$237,700The direct labor estimated for each production department was as follows:Pattern Department1,800 direct labor hoursCut and Sew Department2,300Total4,100 direct labor hoursDirect labor hours are used to allocate the production department overhead to the products. The direct labor hours per unit for each product for each production department were obtained from the engineeringrecords as follows:Production DepartmentsSmall GloveMedium GloveLarge GlovePattern Department0.050.060.07Cut and Sew Department0.080.100.12Direct labor hours per unit0.130.160.19If required, round all per unit answers to the nearest cent.a. Determine the two production department factory overhead rates.Pattern Department$per dlhCut and Sew Department$4per dlhb. Use the two production department factory overhead rates to determine the factory overhead per unit for each product.Small gloveper unitMedium glove$per unitLarge glove$per unit

Predetermined overhead rate is calculated as estimated overhead cost divided by estimated base…

Multiple Production Department Factory Overhead Rate Method 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 C 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 overhea costs were budgeted as follows: Pattern Department overhead $88,200 Cut and Sew Department overhead 149,500 Total $237,700 The direct labor estimated for each production department was as follows: Pattern Department 1,800 direct labor hours

Multiple Production Department Factory Overhead Rate Method 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 C 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 overhea costs were budgeted as follows: Pattern Department overhead $88,200 Cut and Sew Department overhead 149,500 Total $237,700 The direct labor estimated for each production department was as follows: Pattern Department 1,800 direct labor hours

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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