The estimated direct labor rate is $20 per direct labor hour. Beginning and endi
ID: 2456999 • Letter: T
Question
The estimated direct labor rate is $20 per direct labor hour. Beginning and ending inventories are negligible and are, thus, assumed to be zero. The budgeted factory overhead for OCEP is $184,320.
If required, round all per unit answers to the nearest cent.
a. Determine the plantwide factory overhead rate.
$________ per dlh
Determine the factory overhead and direct labor cost per unit for each product.
c. Use the information above to construct a budgeted gross profit report by product line for the year ended December 31, 2014. Include the gross profit as a percent of sales in the last line of your report, rounded to one decimal place. Enter all amounts as positive numbers, except for a negative gross profit/gross profit percentage of sales.
Orange County Engine Parts Inc.
Product Line Budgeted Gross Profit Reports
For the Year Ended December 31, 2014
Pistons
Valves
Cams
$
$
$
$
$
$
$
$
$
Gross profit
$
$
$
Gross profit percentage of sales
%
%
%
Direct LaborHours Per Unit Factory Overhead
Cost Per Unit Direct Labor
Cost Per Unit Pistons $ $ Valves $ $ Cams $ $
Explanation / Answer
Answers
Pistons
Valves
Cams
TOTALs
Units
7200
28800
1200
37200
Labor hour per unit
0.2
0.15
0.32
Total Direct Labor Hours
1440
4320
384
6144
Total Budgeted Factory Overheads
$ 1,84,320.00
Total Direct Labor Hours
6144
Plantwide factory Overhead rate
$ 30.00 per DLH
Direct Labor Hour per unit
Factory Overhead cost per unit
Direct Labor Cost per unit
[A = given]
[B = A x $ 30 per DLH]
[C = A x $ 20 per DLH]
Pistons
0.2
$ 6.00
$ 4.00
Valves
0.15
$ 4.50
$ 3.00
Cams
0.32
$ 9.60
$ 6.40
Orange County Engine Parts Inc.
Product Line Budgeted Gross Profit Reports
For the Year Ended December 31, 2014
Working
Pistons
Valves
Cams
A
Total Sales Revenue
$ 3,60,000.00
$ 2,88,000.00
$ 84,000.00
B
Direct Material Cost
$ 1,80,000.00
$ 1,15,200.00
$ 34,800.00
C
Direct Labor Cost
$ 28,800.00
$ 86,400.00
$ 7,680.00
D
Factory Overhead cost
$ 43,200.00
$ 1,29,600.00
$ 11,520.00
E=B+C+D
Total Cost
$ 2,52,000.00
$ 3,31,200.00
$ 54,000.00
F=A-E
Gross Profits
$ 1,08,000.00
$ (43,200.00)
$ 30,000.00
G=F/A
Gross Profit % of sales
30.0%
-15.0%
35.7%
Working for above:
Orange County Engine Parts Inc.
Product Line Budgeted Gross Profit Reports
For the Year Ended December 31, 2014
Working
Pistons
Valves
Cams
A
Total Sales Revenue
=7200*50
=28800*10
=1200*70
B
Direct Material Cost
=7200*25
=28800*4
=1200*29
C
Direct Labor Cost
=7200*4
=28800*3
=1200*6.4
D
Factory Overhead cost
=7200*6
=28800*4.5
=1200*9.6
E=B+C+D
Total Cost
E=B+C+D
E=B+C+D
E=B+C+D
F=A-E
Gross Profits
F=A-E
F=A-E
F=A-E
G=F/A
Gross Profit % of sales
G=F/A
G=F/A
G=F/A
Pistons
Valves
Cams
TOTALs
Units
7200
28800
1200
37200
Labor hour per unit
0.2
0.15
0.32
Total Direct Labor Hours
1440
4320
384
6144