Single Plantwide Factory Overhead Rate Spotted Cow Dairy Company manufactures th
ID: 2536802 • Letter: S
Question
Single Plantwide Factory Overhead Rate Spotted Cow Dairy Company manufactures three products-whole milk, skim milk, and cream-in two production departments, Blending and Packing. The factory overhead for Spotted Cow Dairy is $360,000 The three products consume both machine hours and direct labor hours in the two production departments as follows: Direct Labor Hours Machine Hours Blending Department Whole milk Skim milk Cream 250 270 220 740 780 710 280 1,770 Packing Department Whole milk Skim milk Cream 350 550 160 1,060 1,800 470 580 180 1,230 3,000 Total 1. Determine the single plantwide factory overhead rate, using each of the following allocation bases: (a) direct labor hours and (b) machine hours. If required, round all amounts to the nearest dollar a. Direct labor overhead rate b.Machine hour overhead rate 2. Determine the product factory overhead costs, using (a) the direct labor hour plantwide factory overhead rate and (b) the machine hour plantwide factory overhead rate per direct labor hour per machine hour Whole Milk Skim Milk Cream Direct labor hours Machine hoursExplanation / Answer
Answer for 1a)
Direct labour overhead rate:
$360000/1800 hours
=$200 per direct labour hour.
Answer for 1b)
Machine hour Overhead rate:
$360000/3000 hours=$120 per machine hour.
Answer for 2)
$120000
[$200 per hours×(250 hours+350 hours)]
$164000
[$200×(270 hours+550 hours)]
$76000
[$200×(220hours+160 hours)]
150000
[$120×(780hours+470 hours)]
$154800
[$120×(710 hous+580 hours)]
$55200
[$120×(280 hours+180 hours)]
Whole milk skim milk cream Direct labour hours ($)$120000
[$200 per hours×(250 hours+350 hours)]
$164000
[$200×(270 hours+550 hours)]
$76000
[$200×(220hours+160 hours)]
Machine hours ($)150000
[$120×(780hours+470 hours)]
$154800
[$120×(710 hous+580 hours)]
$55200
[$120×(280 hours+180 hours)]