Answer:
Bach Instruments Inc.
a. Single plantwide factory overhead rate:
= Total overhead/total labor hours = $126,480/3,720 = $34 per hour
b. Total Factory Overhead Cost
Labor Per Unit Cost Product units Total Costs
Hours (Labor hours x $34) per product
Flutes 0.4 $13.60 2,100 $28,560
Clarinets 1.5 51.00 800 40,800
Oboes 1.2 40.80 1,200 57,120
Total $126,480
Explanation:
a) Data & Calculations:
Budgeted factory overhead = $126,480
Budgeted Direct labor Total
Production Volume hours per unit Hours
Flutes 2,100 units 0.4 840
Clarinets 800 1.5 1,200
Oboes 1,400 1.2 1,680
Total hours 3,720
c) Plantwide overhead allocation per unit = $126,480/3,720 = $34
d) The plantwide overhead rate is the dividend from total overhead costs and total labor hours. This rate is applied to the products based on the number of hours used to product a unit to obtain the per unit cost rate for each product. The resulting rate is further applied to the units produced in each product type to get the total cost of overhead for each product.
