A. Explanation Multiple production department factory overhead rates: This allocation method identifies different departments in the process of production. The factory overheads are allocated to products based on the overhead rate for each of the production departments. Formula to compute multiple production department overhead rates: Multiple production department overhead rate } = Budgeted department factory overhead Budgeted Department allocation base Compute multiple production department overhead rates for assembly department. Multiple production department overhead rate } = Budgeted department fact B. To determine Compute the factory overhead allocated to total and per unit of each product

15th Edition

ISBN: 9781337912020

Author: Carl Warren, Ph.d. Cma William B. Tayler

Publisher: South-Western College Pub

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Chapter 4, Problem 14E

To determine

Compute the multiple production department overhead rate for both departments

To determine

Compute the factory overhead allocated to total and per unit of each product

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Chapter 4, Problem 13E

Chapter 4, Problem 15E

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Multiple Production Department Factory Overhead Rate Method Four Finger Appliance Company manufactures small kitchen appliances. The product line consists of blenders and toaster ovens. Four Finger Appliance presently uses the multiple production department factory overhead rate method. The factory overhead is as follows: Assembly Department $78,000 Test and Pack Department 54,000 Total $132,000 The direct labor information for the production of 3,700 units of each product is as follows: Assembly Department Test and Pack Department Blender 500 dlh 1,500 dlh Toaster oven 1,500 500 Total 2,000 dlh 2,000 dlh Four Finger Appliance used direct labor hours to allocate production department factory overhead to products. If required, round all per unit answers to the nearest cent. a. Determine the two production department factory overhead rates. Assembly Department $ per direct labor hour Test and Pack Department $…

Big Sound Inc. manufactures two products: receivers and loudspeakers. The factory overhead incurred is as follows: Line Item Description Amount Indirect labor $400,400 Subassembly Department 198,800 Final Assembly Department 114,800 Total $714,000 The activity-base usage quantities and units produced for the two products follow: Line Item Description Number ofSetups Number ofInspections Direct LaborHours—Subassembly Direct LaborHours—Final Assembly UnitsProduced Receivers 80 450 875 525 7,000 Loudspeakers 320 1,750 525 875 7,000 Total 400 2,200 1,400 1,400 14,000 Required: 1. Determine a plantwide overhead rate based upon direct labor hours.fill in the blank 1 of 1Direct labor overhead rate: $ per direct labor hour 2. Determine the total and per-unit factory overhead costs allocated to each product, using the plantwide overhead rate in (1). Round per unit amounts to the nearest whole…

Four Finger Appliance Company manufactures small kitchen appliances. The product line consists of blenders and toaster ovens. Four Finger Appliance presently uses the multiple production department factory overhead rate method. The factory overhead is as follows: 1 Assembly Department $275,736.00 2 Test and Pack Department 201,046.00 3 Total $476,782.00 The direct labor information for the production of 8,390 units of each product is as follows: Department Assembly Test and Pack Blender 740 dlh 2,040 dlh Toaster oven 2,205 680 Total 2,945 dlh 2,720 dlh Four Finger Appliance used direct labor hours to allocate production department factory overhead to products. The management of Four Finger Appliance Company has asked you to use activity-based costing instead of direct labor hours to allocate factory overhead costs to the two products. You have determined that $81,366 of factory overhead from each of the production…

Chapter 4 Solutions

Managerial Accounting

Ch. 4 - Why would management be concerned about the...Ch. 4 - Why would a manufacturing company with multiple...Ch. 4 - Prob. 3DQ Ch. 4 - Prob. 4DQ Ch. 4 - How does activity-based costing differ from the...Ch. 4 - Prob. 6DQ Ch. 4 - Prob. 7DQ Ch. 4 - Under what circumstances might the activity-based...Ch. 4 - Prob. 9DQ Ch. 4 - Prob. 10DQ

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Compute the multiple production department overhead rate for both departments

Solution Summary: The author explains the multiple production department factory overhead rate for both departments.

Compute the multiple production department overhead rate for both departments

Compute the factory overhead allocated to total and per unit of each product

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Chapter 4 Solutions