Pistons Valves Cams Budgeted Volume (Units) 6,000 13,000 1,000 Direct Labor Hours Per Unit Pistons Valves Cams 0.30 0.50 0.10 Price Per Unit Direct Labor Hours Per Unit dih dlh $40 dih 21 The estimated direct labor rate is $20 per direct labor hour. Beginning and ending inventories are negligible and are, thus, assumed to be zero. The budgeted factory overhead for Isaac Engines is $235,200. If required, round all per unit answers to the nearest cent. 55 a. Determine the plantwide factory overhead rate. $ per dlh b. Determine the factory overhead and direct labor cost per unit for each product. Direct Materials Per Unit $9 5 20 Factory Overhead Cost Per Unit Isaac Engines Inc. Product Line Budgeted Gross Profit Direct Labor Cost Per Unit c. Use the information provided to construct a budgeted gross profit report by product line for the year ended December 31, 20Y2. Include the gross profit as a percent of sales in the last line of your report, rounded to one decimal place.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Pistons
Valves
Cams
Budgeted
Volume
(Units)
Pistons
6,000
13,000
1,000
Valves
Direct Labor
Hours Per Unit
Cams.
The estimated direct labor rate is $20 per direct labor
hour. Beginning and ending inventories are negligible
and are, thus, assumed to be zero. The budgeted factory
overhead for Isaac Engines is $235,200.
0.30
0.50
0.10
If required, round all per unit answers to the
nearest cent.
Direct Labor
Hours Per Unit
dih
dlh
dih
Product Costs
a. Determine the plantwide factory overhead rate.
$
per dlh
b. Determine the factory overhead and direct labor cost
per unit for each product.
Total Product Costs
Gross profit (loss)
Gross profit percentage of sales
Price Per
Unit
$
$40
21
55
Isaac Engines Inc.
Product Line Budgeted Gross Profit
Reports
$
$
Factory Overhead
Cost Per Unit
$
$
For the Year Ended December 31, 20Y2
Cams
Pistons
%
c. Use the information provided to construct a
budgeted gross profit report by product line for the year
ended December 31, 20Y2. Include the gross profit as a
percent of sales in the last line of your report, rounded
to one decimal place.
$
Direct Materials
Per Unit
$
Valves
%
$
$9
$
5
20
$
Direct Labor
Cost Per Unit
$
%
Transcribed Image Text:Pistons Valves Cams Budgeted Volume (Units) Pistons 6,000 13,000 1,000 Valves Direct Labor Hours Per Unit Cams. The estimated direct labor rate is $20 per direct labor hour. Beginning and ending inventories are negligible and are, thus, assumed to be zero. The budgeted factory overhead for Isaac Engines is $235,200. 0.30 0.50 0.10 If required, round all per unit answers to the nearest cent. Direct Labor Hours Per Unit dih dlh dih Product Costs a. Determine the plantwide factory overhead rate. $ per dlh b. Determine the factory overhead and direct labor cost per unit for each product. Total Product Costs Gross profit (loss) Gross profit percentage of sales Price Per Unit $ $40 21 55 Isaac Engines Inc. Product Line Budgeted Gross Profit Reports $ $ Factory Overhead Cost Per Unit $ $ For the Year Ended December 31, 20Y2 Cams Pistons % c. Use the information provided to construct a budgeted gross profit report by product line for the year ended December 31, 20Y2. Include the gross profit as a percent of sales in the last line of your report, rounded to one decimal place. $ Direct Materials Per Unit $ Valves % $ $9 $ 5 20 $ Direct Labor Cost Per Unit $ %
Expert Solution
Step 1

Plant wide overhead rate is simple method of cost allocation. In this method a single rate is uses to allocate overhead to products. This method is useful for small entities. 

Plant wide overhead rate is 

Total overhead / basis of allocation 

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