Laval produces lamps and home lighting fixtures. Its most popular product is a brushed aluminum desk lamp. Thislamp is made from components shaped in the fabricating department and assembled in the assembly department.Information related to the 33,000 desk lamps produced annually follows.Direct materialsDirect laborFabricating department (7,500 DLH × $23 per DLH)Assembly department (15,400 DLH × $20 per DLH)Machine hoursFabricating departmentAssembly departmentDirect labor hours.Machine hoursOverhead costExpected overhead cost and related data for the two production departments follow.Fabricating130,000 DLH162,000 MH$360,000Assembly280,000 DLH129,000 MH$445,000$260,000$172,500$308,00015,200 MH21,200 MHRequired1. Determine the plantwide overhead rate for Laval using direct labor hours as a base.2. Determine the total manufacturing cost per unit for the aluminum desk lamp using the plantwide overhead rate.3. Compute departmental overhead rates based on machine hours in the fabricating department and direct laborhours in the assembly department.4. Use departmental overhead rates from requirement 3 to determine the total manufacturing cost per unit for thealuminum desk lamps.Complete this question by entering your answers in the tabs below.Required 4Required 1 Required 2 Required 3Determine the plantwide overhead rate for Laval using direct labor hours as a base.< Required 1Required 2 >

Manufacturing cost -is the cost of manufacturing or producing the products or services and includes…

Required 1. Determine the plantwide overhead rate for Laval using direct labor hours as a base. 2. Determine the total manufacturing cost per unit for the aluminum 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. Use departmental overhead rates from requirement 3 to determine the total manufacturing cost per unit for the aluminum desk lamps.

Required 1. Determine the plantwide overhead rate for Laval using direct labor hours as a base. 2. Determine the total manufacturing cost per unit for the aluminum 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. Use departmental overhead rates from requirement 3 to determine the total manufacturing cost per unit for the aluminum desk lamps.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit. Overhead expenses depend upon the nature of the business operations.

Question

Laval produces lamps and home lighting fixtures. Its most popular product is a brushed aluminum desk lamp. This
lamp is made from components shaped in the fabricating department and assembled in the assembly department.
Information related to the 33,000 desk lamps produced annually follows.
Direct materials
Direct labor
Fabricating department (7,500 DLH × $23 per DLH)
Assembly department (15,400 DLH × $20 per DLH)
Machine hours
Fabricating department
Assembly department
Direct labor hours.
Machine hours
Overhead cost
Expected overhead cost and related data for the two production departments follow.
Fabricating
130,000 DLH
162,000 MH
$360,000
Assembly
280,000 DLH
129,000 MH
$445,000
$260,000
$172,500
$308,000
15,200 MH
21,200 MH
Required
1. Determine the plantwide overhead rate for Laval using direct labor hours as a base.
2. Determine the total manufacturing cost per unit for the aluminum 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. Use departmental overhead rates from requirement 3 to determine the total manufacturing cost per unit for the
aluminum desk lamps.
Complete this question by entering your answers in the tabs below.
Required 4
Required 1 Required 2 Required 3
Determine the plantwide overhead rate for Laval using direct labor hours as a base.
< Required 1
Required 2 >

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