Single Plantwide Factory Overhead Rate 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 $184,800. The three products consume both machine hours and direct labor hours in the two production departments as follows: Direct Labor Machine Hours Hours Blending Department Whole milk 190 570 Skim milk 200 520 Cream 160 210 550 1,300 Packing Department Whole milk 250 340 Skim milk 400 420 Cream 120 140 770 900 Total 1,320 2,200 Required: 1. Determine the single plantwide factory overhead rate, using each of the following allocation bases: (a) direct labor hours and (b) machine hours.If reauired. round all amounts to the nearest dollar.
Single Plantwide Factory Overhead Rate 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 $184,800. The three products consume both machine hours and direct labor hours in the two production departments as follows: Direct Labor Machine Hours Hours Blending Department Whole milk 190 570 Skim milk 200 520 Cream 160 210 550 1,300 Packing Department Whole milk 250 340 Skim milk 400 420 Cream 120 140 770 900 Total 1,320 2,200 Required: 1. Determine the single plantwide factory overhead rate, using each of the following allocation bases: (a) direct labor hours and (b) machine hours.If reauired. round all amounts to the nearest dollar.
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Single Plantwide Factory Overhead Rate
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 $184,800.
The three products consume both machine hours and direct labor hours in the two production departments as follows:
Direct Labor
Machine
Hours
Hours
Blending Department
Whole milk
190
570
Skim milk
200
520
Сream
160
210
550
1,300
Packing Department
Whole milk
250
340
Skim milk
400
420
Cream
120
140
770
900
Total
1,320
2,200
Required:
1. Determine the single plantwide factory overhead rate, using each of the following allocation bases: (a) direct labor hours and (b) machine hours. If
reauired. round all amounts to the nearest dollar.
Transcribed Image Text:Cream
160
210
550
1,300
Packing Department
Whole milk
250
340
Skim milk
400
420
Cream
120
140
770
900
Total
1,320
2,200
Required:
1. Determine the single plantwide factory verhead rate, using each of the following allocation bases: (a) direct labor hours and (b) machine hours. If
required, round all amounts to the nearest dollar.
a. Direct labor overhead rate
$4
142.15
per direct labor hour
b. Machine hour overhead rate
84
per machine hour
2. Determine the product factory overhead costs, using (a) the direct labor hour plantwide factory overhead rate and (b) the machine hour plantwide
factory overhead rate.
Whole Milk
Skim Milk
Cream
Direct labor hours
Machine hours
%24
%24
%24
%24
Expert Solution
Step 1
Overhead:
It is a cost that very important to run the organization. It is divided into two types
- Fixed overhead cost
- Variable overhead cost
Factor overhead (FOH):
Factor overhead is an addition of all indirect costs incurred during the process of production. It is also called manufacturing overhead. It includes all indirect material and indirect labor costs. Example: Light, Power. Making
Direct labor:
Direct labor includes workers engaged in making the product whose physical effort convert raw material into a finished product. Direct labor overhead rate is a rate calculated by dividing factory overhead cost by total direct labor hours.
Machine hours overhead rate is a rate calculated by dividing factory overhead cost by total machine hours.
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