Show Me How Rate Method Performance Gloves, Inc. produces three sizes of sports
ID: 2404232 • Letter: S
Question
Show Me How Rate Method Performance Gloves, Inc. produces three sizes of sports oloves: small, medium, and large. A glove pattern is first stenciled onto leather in the Pattern multiple production department factory overhead rate method Pattern Department overhead Cut and Sew Department overhead The stendiled patterns are then sent to the Cut and Sew Department, where the glove is cut and sewed together. Performance Gloves uses th of allocating factory overhead costs. Its factory overhead costs were budgeted as follows: $143,000 240,800 $383,800 Total Pattern Department 2,200 direct labor hours Cut and Sew Department 5,000 direct labor hours 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: Production Departments Small Glove Medium Glove Large Glove 0.04 0.08 0.12 0.06 0.12 0.18 0.10 Direct labor hours per unit If required, round all per unit answers to the nearest cent. a. Determine the two 0.15Explanation / Answer
a Pattern department Overhead $143,000 ÷ Pattern department Direct labor 2200 Factory overhead rate per hour $ 65.00 Cut and Sew department Overhaed $240,800 ÷ Cut and Sew department Direct labor 2800 Factory overhead rate per hour $ 86.00 b Small Glove Hour Rate Amount Pattrn department labor hour 0.04 x 65 2.6 Cut and Sew department labor hour 0.08 x 86 6.88 $ 9.48 Per Unit Medium Glove Hour Rate Amount Pattrn department labor hour 0.05 x 65 3.25 Cut and Sew department labor hour 0.1 x 86 8.6 $ 11.85 Per Unit Large Glove Hour Rate Amount Pattrn department labor hour 0.06 x 65 3.9 Cut and Sew department labor hour 0.12 x 86 10.32 $ 14.22 Per Unit