The total factory overhead for Big Light Company is budgeted for the year at $1,701,700. Big Light manufactures two different products: night lights and desk lamps. Night lights are budgeted for 13,100 units. Each night light requires 3 hours of direct labor. Desk lamps are budgeted for 16,100 units. Each desk lamp requires 2 hours of direct labor. a. Determine the total number of budgeted direct labor hours for the year. b. Determine the single plantwide 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 plantwide factory overhead rate determined in (b).
The total factory overhead for Big Light Company is budgeted for the year at $1,701,700. Big Light manufactures two different products: night lights and desk lamps. Night lights are budgeted for 13,100 units. Each night light requires 3 hours of direct labor. Desk lamps are budgeted for 16,100 units. Each desk lamp requires 2 hours of direct labor. a. Determine the total number of budgeted direct labor hours for the year. b. Determine the single plantwide 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 plantwide factory overhead rate determined in (b).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The total factory overhead for Big Light Company is budgeted for
the year at $1,701,700. Big Light manufactures two different
products: night lights and desk lamps. Night lights are budgeted
for 13,100 units. Each night light requires 3 hours of direct labor.
Desk lamps are budgeted for 16,100 units. Each desk lamp
requires 2 hours of direct labor.
a. Determine the total number of budgeted direct labor hours for
the year.
b. Determine the single plantwide 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 plantwide factory overhead rate
determined in (b).
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