Question

Multiple Production Department Factory Overhead Rates The total factory overhead for Bardot Marine Company is budgeted for the year at $396,000, divided into two departments: Fabrication, $270,000, and Assembly, $126,000. Bardot Marine manufactures two types of boats: speedboats and bass boats. The speedboats require one direct labor hour in Fabrication and one direct labor hour in Assembly. The bass boats require one direct labor hour in Fabrication and two direct labor hours in Assembly. Each product is budgeted for 6,000 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

Answer:

a. Determine the total number of budgeted direct labor hours for the year in each department.

• Fabrication 12,000 direct hours
• Assembly 18,000 direct hours

b. Determine the departmental factory overhead rates for both departments.

• Fabrication $270,000 / 12,000 direct hours = $22.50 per direct labor hour
• Assembly $126,000 / 18,000 direct hours = $7 per direct labor hour

c. Determine the factory overhead allocated per unit for each product using the department factory overhead allocation rates.

• Speedboats = $22.50 + $7 = $29.50
• Bass boats = $22.50 + $14 = $36.50

Explanation:

total overhead expense $396,000

• Fabrication $270,000
• Assembly $126,000

speedboats (6,000 units)

• Fabrication 1 hour x 6,000 = 6,000 hours
• Assembly 1 hour x 6,000 = 6,000 hours

bass boats (6,000 units)

• Fabrication 1 hour x 6,000 = 6,000 hours
• Assembly 2 hours x 6,000 = 12,000 hours