Answer:
a. Determine the two production department factory overhead rates.
Pattern department = $50 per hour
Cut and sew department = $67 per hour
b. Use the two production department factory overhead rates to determine the factory overhead per unit for each product.
Production Small Medium Large
<u>Departments Glove Glove Glove</u>
Pattern Department $2.00 $2.50 $3.00
Cut and Sew Department $5.36 $6.70 $8.04
Explanation:
small, medium, large
Pattern Department overhead $135,000
Cut and Sew Department overhead $227,800
Total $362,800
Pattern Department 2,700 direct labor hours
Cut and Sew Department 3,400
Total 6,100 direct labor hours
Overhead rate per hour:
Pattern department = $135,000 / 2,700 hours = $50 per hour
Cut and sew department = $227,800 / 3,400 hours = $67 per hour
Production Small Medium Large
Departments Glove Glove Glove
Pattern Department 0.04 0.05 0.06
Per unit ($50) $2.00 $2.50 $3.00
Cut and Sew Department 0.08 0.10 0.12
Per unit ($67) $5.36 $6.70 $8.04
