Single Plantwide Factory Overhead Rate Mozart Music Inc. makes three musical ins
ID: 2544939 • Letter: S
Question
Single Plantwide Factory Overhead Rate Mozart Music Inc. makes three musical instruments: trumpets, tubas, and trombones. The budgeted factory overhead cost is $116,700. 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: Budgeted Production Volume Direct Labor Hours Per Unit Trumpets 2,300 units 0.8 Tubas 500 1.5 Trombones 1,300 1.0 If required, round all per unit answers to the nearest cent. a.Determine the single plantwide factory overhead rate. b.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.
Explanation / Answer
total direct labor hours = budgeted production volume*Direct labor hours total Volume DL per unit hours Trumpets 2,300 0.8 1840 Tubas 500 1.5 750 Trombones 1,300 1 1300 total budgeted hours 3890 1) Single plantwide Factory overhead rate Budgeted overhead/budgeted hours 116,700/3890 30 per direct labor hour 2) Factory overhead allocated = $30 rate * budgeted direct labor hours factory overhead per unit = FOH allocated/volume (a) B c=a*b d e=c/d rate hours FOH allocated Volume OH per unit Trumpets $30 1,840 55200 2,300 24 Tubas $30 750 22500 500 45 Trombones $30 1300 39000 1,300 30