Question

The total factory overhead for Bardot Marine Company is budgeted for the year at $367,500. Bardot Marine manufactures two types of boats: speed boats and bass boats. The speedboat and bass boat each require three direct labor hours for manufacture. Each product is budgeted for 5,000 units of production for the year.
When required, round all per unit answers to the nearest cent.
A. Determine the total number of budgeted direct labor hours for the year in each department.
Fabrication direct labor hours
Assembly direct labor hours
B. Determine the departmental factory overhead rates for both departments.
Fabrication $ per dlh
Assembly $ per dlh
C. Determine the factory overhead allocated per unit for each product using the department factory overhead allocation rates.
Speedboat: $ per unit
Bass boat: $ per unit

Answer 1

Question Completion:

The speed boat requires 2 hours in fabrication and 1 hour in assembly.  The bass boat requires 1 hour in fabrication and 2 hours in assembly.

Answer:

Bardot Marine Company

A. Determination of the total number of budgeted direct labor hours in each department:

                             Speed boats    Bass boats   Total hours

Direct labor hours:

Fabrication                10,000           5,000           15,000

Assembly                   5,000          10,000           15,000

Total                         15,000          15,000           30,000

B. Determination of the departmental factory overhead rates for both departments:

Overhead rate = $367,500/30,000 = $12.25

Fabrication $ per dlh  = $12.25

Assembly $ per dlh = $12.25

C. Determination of the factory overhead allocated per unit for each product using the department factory overhead allocation rates:

Speedboat: $ per unit  = $36.75 ($12.25 x 3)

Bass boat: $ per unit =   $36.75 ($12.25 x 3)

Explanation:

a) Data and Calculations:

Total factory overhead = $367,500

                                   Speed Boats        Bass Boats

Budgeted units                5,000                5,000

Hours per unit                   3                         3

Total direct labor hour   15,000              15,000

Fabrication                        2 hrs                   1 hr    

Assembly                           1 hr                    2 hrs

Total direct labour hours:

Fabrication                   10,000                 5,000

Assembly                      5,000                 10,000