Matt’s Music Inc. makes three musical instruments: trumpets, tubas, and trombone

Question

Matt’s Music Inc. makes three musical instruments: trumpets, tubas, and trombones. The budgeted factory overhead cost is $189,332. Factory overhead is allocated to the three products on the basis of direct labor hours. The products have the following budgeted production volume and direct labor hours per unit:

1.25

Use the factory overhead rate in (A) to determine the amount of total and per-unit factory overhead allocated to each of the three products. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.

WHAT AM I DOING WRONG??

Budgeted Production Direct Labor Hours Volume (in units) per Unit Trumpets 2,000 0.75 Tubas 700 1.70 Trombones 1,290

1.25

Explanation / Answer

First we calculate the direct labor hours:

2000 *0.75 = 1500 hrs

700 * 1.70 = 1190 hrs

1290 * 1.25 = 1612.50 hrs.

Total = 4302.50 hrs.

single plantwide factory overhead rate = 189332 / 4302.50 = $44.005 OR $44

DLH's (A) Per hour rate $ (B) total Overhead $ (C=A*B) Units Produced (D) Overhead per unit (E=C/D) trumpets 1500 44 66007.67 2000 $33 tubas 1190 44 52360 700 74.80 trombones 1612.5 44 70950 1290 55 Add: Short / Excess due fraction left while getting single overhead rate 14.33 Total $189332

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