Question

1. Multiple Production Department Factory Overhead Rates

   The total factory overhead for Bardot Marine Company is budgeted for the year at $528,750, divided into two departments: Fabrication, $363,750, and Assembly, $165,000. Bardot Marine manufactures two types of boats: speedboats and bass boats. The speedboats require two direct labor hours in Fabrication and two direct labor hours in Assembly. The bass boats require one direct labor hour in Fabrication and one direct labor hour in Assembly. 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

   Feedback

   Calculate:
   (a) For each department, multiply number of pant type x direct labor hours required. Add both pant hours together to obtain the total for the department.
   (b) Total overhead for each department ÷ hours calculated in Req. (a) = departmental rate
   (c) For each pant type, determine the overhead from each department by multiplying direct labor hours x rate determined in Req. (b). Then add together the overhead from both departments for each pant type to obtain overhead allocated per unit of product.

   Learning Objective 3

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Answer 1

a.The total number of budgeted labour hours for the year in each department.

Fabrication department

1. Number of speed boats × hours required for each = 5000×2 = 10000 hours

2. Number of bass boats × hours required for each = 5000×1= 5000 hours

Total number of direct labour hours in fabrication department

= 10000+5000= 15000 labour hours.

Assembly department

1. Number of speed boats × hours required for each = 5000×2 =10000 hours.

2. Number of bass boats × hours required for each = 5000× 1 = 5000 hours.

Total number of labour hours in assembly department

= 10000+5000= 15000 labour hours.

Fabrication department	15000 direct labour hours
Assembly department	15000 direct labour hours

b. Departmental factory overhead for each department

Department (1)	overhead (2)	direct labour hours(3)	(2)÷(3)
Fabrication	363,750	15000	$24.25 per dlh
Assembly	165,000	15000	$11 per dlh

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

Speed boats

fabrication department = $24.25 per dlh × 2 dlh = $ 48.5

Assembly department =$11 per dlh × 2 dlh = $22

Total factory overhead allocated per unit = $48.5+$22=$70.5 per unit

Bass boats

fabrication department = $ 24.25 per dlh× 1 dlh =$24.25

Assembly department = $11 per dlh × 1 dlh = $ 11

Total factory overhead allocated per unit = $35.25 per unit.