Answered: Single plantwide factory overhead rate…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 2E: Bach Instruments Inc. makes three musical instruments: flutes, clarinets, and oboes. The budgeted...

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Single plantwide factory overhead rate

Bach Instruments Inc. makes three musical instruments: flutes, clarinets, and oboes. The budgeted factory overhead cost is $105,000. Overhead is allocated to the three products on the basis of direct labor hours. The products have the following budgeted production volume and direct labor hours per unit:

	Budgeted Production Volume	Direct Labor Hours Per Unit
Flutes	2,300	units	0.6
Clarinets	700		1.6
Oboes	1,000		1.0

If required, round all per unit answers to the nearest cent.

a. Determine the single plantwide overhead rate.
$fill in the blank 1 per direct labor hour

b. Use the overhead rate in (a) to determine the amount of total and per-unit overhead allocated to each of the three products.

	Total Factory Overhead Cost	Per Unit Factory Overhead Cost
Flutes	$fill in the blank 2	$fill in the blank 3
Clarinets	fill in the blank 4	fill in the blank 5
Oboes	fill in the blank 6	fill in the blank 7
Total	$fill in the blank 8