Question

The total factory overhead for Landen Company is budgeted for the year at $675,000. Landen manufactures two drapery products: sheer curtains and insulated curtains. These products each require 6 direct labor hours (dlh) to manufacture. Each product is budgeted for 7,500 units of production for the year. What would the factory overhead allocated per unit for insulated curtains using the single plantwide factory overhead rate be

Answer 1

Answer:

$45.00 allocated per insulated curtain

Explanation:

Calculation for What would the factory overhead allocated per unit for insulated curtains using the single plantwide factory overhead rate be

First step is to calculate the Total budgeted plantwide allocation base for sheer curtains and

insulated curtains

Budgeted plantwide allocation base for sheer curtains =7,500 units × 6 dlh

Budgeted plantwide allocation base for sheer curtains=45,000 dlh

Budgeted plantwide allocation base for insulated curtains =7,500 units × 6 dlh

Budgeted plantwide allocation base for insulated curtains = 45,000 dlh

Total budgeted plantwide allocation base=45,000 dlh+45,000 dlh

Total budgeted plantwide allocation base=90,000 dlh

Now let calculate the Single plantwide factory overhead rate using this formula

Single plantwide factory overhead rate =(Total budgeted factory overhead /Total budgeted plantwide allocation base) *Overhead rate

Let plug in the formula

Single plantwide factory overhead rate=($675,000 / 90,000) × 6 hours

Single plantwide factory overhead rate = $45.00 allocated per insulated curtain

Therefore What would the factory overhead allocated per unit for insulated curtains using the single plantwide factory overhead rate be is $45.00 allocated per insulated curtain