Multiple Production Department Factory Overhead Rates Spotted Cow Dairy Company manufactures three products—whole milk, skim milk, and cream—in two production departments, Blending and Packing. The factory overhead for Spotted Cow Dairy is $274,900. The three products consume both machine hours and direct labor hours in the two production departments as follows: Direct Labor Hours Machine Hours Blending Department Whole milk 660 890 Skim milk 420 720 Cream 320 570 1,400 2,180 Packing Department Whole milk 190 1,360 Skim milk 210 840 Cream 190 900 590 3,100 Total 1,990 5,280 The management of Spotted Cow Dairy Company now plans to use the multiple production department factory overhead rate method. The total factory overhead associated with each department is as follows: Blending Department $154,000 Packing Department 120,900 Total $274,900 Required: If required, round all amounts to the nearest dollar. 1. Determine the multiple production department factory overhead rates, using direct labor hours for the Blending Department and machine hours for the Packing Department. Blending Department $fill in the blank 1 per direct labor hour Packing Department $fill in the blank 2 per machine hour 2. Determine the product factory overhead costs, using the multiple production department rates in (1). Whole milk Skim milk Cream Blending Department factory overhead $fill in the blank 3 $fill in the blank 4 $fill in the blank 5 Packing Department factory overhead fill in the blank 6 fill in the blank 7 fill in the blank 8 Total factory overhead $fill in the blank 9 $fill in the blank 10 $fill in the blank 11

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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Multiple Production Department Factory Overhead Rates

Spotted Cow Dairy Company manufactures three products—whole milk, skim milk, and cream—in two production departments, Blending and Packing. The factory overhead for Spotted Cow Dairy is $274,900.

The three products consume both machine hours and direct labor hours in the two production departments as follows:

	Direct Labor Hours	Machine Hours
Blending Department
Whole milk		660		890
Skim milk		420		720
Cream		320		570
		1,400		2,180
Packing Department
Whole milk		190		1,360
Skim milk		210		840
Cream		190		900
		590		3,100
	Total		1,990		5,280

The management of Spotted Cow Dairy Company now plans to use the multiple production department factory overhead rate method. The total factory overhead associated with each department is as follows:

Blending Department	$154,000
Packing Department	120,900
Total	$274,900

Required:

If required, round all amounts to the nearest dollar.

1. Determine the multiple production department factory overhead rates, using direct labor hours for the Blending Department and machine hours for the Packing Department.

Blending Department	$fill in the blank 1 per direct labor hour
Packing Department	$fill in the blank 2 per machine hour

2. Determine the product factory overhead costs, using the multiple production department rates in (1).

	Whole milk	Skim milk	Cream
Blending Department factory overhead	$fill in the blank 3	$fill in the blank 4	$fill in the blank 5
Packing Department factory overhead	fill in the blank 6	fill in the blank 7	fill in the blank 8
Total factory overhead	$fill in the blank 9	$fill in the blank 10	$fill in the blank 11

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