Performance Gloves, Inc. produces three sizes of sports gloves: small, medium, a
ID: 2334459 • Letter: P
Question
Performance Gloves, Inc. produces three sizes of sports gloves: small, medium, and large. A glove pattern is first stenciled onto leather in the Pattern Department. The stenciled patterns are then sent to the Cut and Sew Department, where the glove is cut and sewed together. Performance Gloves uses the multiple production department factory overhead rate method of allocating factory overhead costs. Its factory overhead costs were budgeted as follows:
The direct labor estimated for each production department was as follows:
Direct labor hours are used to allocate the production department overhead to the products. The direct labor hours per unit for each product for each production department were obtained from the engineering records as follows:
If required, round all per unit answers to the nearest cent.
a. Determine the two production department factory overhead rates.
b. Use the two production department factory overhead rates to determine the factory overhead per unit for each product.
Pattern Department overhead $119,600 Cut and Sew Department overhead 200,100 Total $319,700Explanation / Answer
A A B A/B OH Cost DL Hours Factory OH Rates Pattern Department OH 119600 2300 52.00 Cut & Sew Department OH 200100 2900 69.00 319700 O*A O*B O*C A B C O Allocation B Small Gloves Medium Gloves Large Gloves Factory OH Rates Small Gloves Medium Gloves Large Gloves Pattern Department OH 0.05 0.06 0.07 52.00 2.60 3.12 3.64 Cut & Sew Department OH 0.08 0.10 0.12 69.00 5.52 6.90 8.28 8.12 10.02 11.92