NovaLite Fixtures Inc. has total budgeted factory overhead of $1,800,000 for the year. The company manufactures two products: desk lamps and floor lamps. ⚫ Desk lamps are budgeted for 12,000 units, with each unit requiring 3.5 hours of direct labor. • Floor lamps are budgeted for 15,000 units, with each unit requiring 2.5 hours of direct labor. A. Determine the total number of budgeted direct labor hours for the year. B. Determine the single plant-wide factory overhead rate using direct labor hours as the allocation base. C. Determine the factory overhead allocated per unit for each product using the single plant- wide factory overhead rate determined in (B).

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter8: Budgeting
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NovaLite Fixtures Inc. has total budgeted factory overhead of $1,800,000 for the year. The
company manufactures two products: desk lamps and floor lamps.
⚫ Desk lamps are budgeted for 12,000 units, with each unit requiring 3.5 hours of direct
labor.
•
Floor lamps are budgeted for 15,000 units, with each unit requiring 2.5 hours of direct
labor.
A. Determine the total number of budgeted direct labor hours for the year.
B. Determine the single plant-wide factory overhead rate using direct labor hours as the
allocation base.
C. Determine the factory overhead allocated per unit for each product using the single plant-
wide factory overhead rate determined in (B).
Transcribed Image Text:NovaLite Fixtures Inc. has total budgeted factory overhead of $1,800,000 for the year. The company manufactures two products: desk lamps and floor lamps. ⚫ Desk lamps are budgeted for 12,000 units, with each unit requiring 3.5 hours of direct labor. • Floor lamps are budgeted for 15,000 units, with each unit requiring 2.5 hours of direct labor. A. Determine the total number of budgeted direct labor hours for the year. B. Determine the single plant-wide factory overhead rate using direct labor hours as the allocation base. C. Determine the factory overhead allocated per unit for each product using the single plant- wide factory overhead rate determined in (B).
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