Question

Multiple Production Department Factory Overhead Rates

The total factory overhead for Bardot Marine Company is budgeted for the year at $505,500, divided into two departments: Fabrication, $321,000, and Assembly, $184,500. 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 two direct labor hours in Fabrication and four direct labor hours in Assembly. Each product is budgeted for 3,000 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

Fabrication:
	Speedboat	Bass boat	Total
Budgeted production	3000	3000
X Direct labor hours per unit	2	2
Total direct labor hours	6000	6000	12000
Assembly :
	Speedboat	Bass boat	Total
Budgeted production	3000	3000
X Direct labor hours per unit	2	4
Total direct labor hours	6000	12000	18000
a
Fabrication	12000	direct labor hours
Assembly	18000	direct labor hours
b
Fabrication	26.75	per dlh	=321000/12000
Assembly	10.25	per dlh	=184500/18000
c
Speedboat	74.00	per unit	=(2*26.75)+(2*10.25)
Bass boat	94.50	per unit	=(2*26.75)+(4*10.25)