Check My Work eBook Single Plantwide Factory Overhead Rate Sousa Band Instrument
ID: 2569403 • Letter: C
Question
Check My Work eBook Single Plantwide Factory Overhead Rate Sousa Band Instruments Inc. makes three musical instruments: trumpets, tubas, and trombones. The budgeted factory overhead cost is $142,560. 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: Direct Labor Hours Per Unit 0.5 1.5 Budgeted Production Volume 2,100 units Trumpets Tubas Trombones If required, round all per unit answers to the nearest cent a. Determine the single plantwide factory overhead rate 900 1,300 per direct labor hour 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 Total Per Unit Factory Overhead Factory Overhead Trumpets Tubas Trombones Total Check My WorkExplanation / Answer
Answer a
Total direct labour hours consumed by all the three products
= 2,100 units *0.5 hours + 900 units *1.5 hours + 1,300 * 1.2 hours = 3,960 hours
Budgeted factory overhead = $142,560
Single plant wide FActory overhead Rate = $142,560 / 3,960 hours = $36 per direct labour hour.
Answer b
Total Factory Overhead ($) Per unit factory overhead ($) Trumpets 2,100 units *0.5 hours * $36 = $37,800 0.5 hours * $36 = $18 Tubas 900 units *1.5 hours *$36 = $48,600 1.5 hours *$36 = $54 Trombones 1,300 * 1.2 hours * $36 = $56,160 1.2 hours * $36 = $43.20 Total $142,560