Question

Orange County Chrome Company manufactures three chrome-plated products—automobile bumpers, valve covers, and wheels. These products are manufactured in two production departments (Stamping and Plating). The factory overhead for Orange County Chrome is $223,000.

The three products consume both machine hours and direct labor hours in the two production departments as follows:

	Direct Labor Hours	Machine Hours
Stamping Department
Automobile bumpers	563	799
Valve covers	305	564
Wheels	341	601
	1,209	1,964
Plating Department
Automobile bumpers	172	1,169
Valve covers	178	713
Wheels	177	765
	527	2,647
Total	1,736	4,611

	Required:
Orange County Chrome Company manufactures three chrome-plated products—automobile bumpers, valve covers, and wheels. These products are manufactured in two production departments (Stamping and Plating). The factory overhead for Orange County Chrome is $223,000. The three products consume both machine hours and direct labor hours in the two production departments as follows: Direct Labor Hours Machine Hours Stamping Department Automobile bumpers 563 799 Valve covers 305 564 Wheels 341 601 1,209 1,964 Plating Department Automobile bumpers 172 1,169 Valve covers 178 713 Wheels 177 765 527 2,647 Total 1,736 4,611 Required: 1. Determine the single plantwide factory overhead rate, using each of the following allocation bases: (a) direct labor hours and (b) machine hours. Round your answers to two decimal places. 2. Determine the product factory overhead costs, using (a) the direct labor hour plantwide factory overhead rate and (b) the machine hour plantwide factory overhead rate. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. Round your answers to the nearest dollar amount. X Amount Descriptions Amount Descriptions Activity-base usage Activity rate Direct labor hours Direct labor overhead rate Direct materials Machine hour overhead rate Machine hours X Overhead Rates 1. Determine the single plantwide factory overhead rate, using each of the following allocation bases: (a) direct labor hours and (b) machine hours. Round your answers to two decimal places. Direct labor overhead rate:   per direct labor hour Machine hour overhead rate:   per machine hour 2. Determine the product factory overhead costs, using (a) the direct labor hour plantwide factory overhead rate and (b) the machine hour plantwide factory overhead rate. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. Round your answers to the nearest dollar amount. 1 Automobile Bumpers Valve Covers Wheels 2 3
2.	Determine the product factory overhead costs, using (a) the direct labor hour plantwide factory overhead rate and (b) the machine hour plantwide factory overhead rate. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. Round your answers to the nearest dollar amount.

Answer 1

Solution:

1) Determination of Single Plantwide Factory Overhead Rate

(a) Based on Direct Labor Hours

Total Factory Overhead	$223,000
Total Direct labor Hours	1,736 Direct Labor hours
Single Plantwide Factory Overhead Rate	$128.45622 per direct labor hour (223,000 / 1,736)

(b) Based on Machine Hours

Total Factory Overhead	$223,000
Total Machine Hours	4,611 machine hours
Single Plantwide Factory Overhead Rate	$48.36261 per machine hour (223,000 / 4,611)

2(a) Product Factory Overhead Cost using the direct labor hour plantwide factory overhead rate

	Direct Labor Hours			Factory Overhead Rate Per hour	Total Product wise factory overhead cost
	Stamping Department	Planting Department	Total
Automobile bumpers	563	172	735	$128.45622	$94,415.32
Valve covers	305	178	483	$128.45622	$62,044.35
Wheels	341	177	518	$128.45622	$66,540.32
					$223,000.00

2(a) Product Factory Overhead Cost using the machine hour plantwide factory overhead rate

	Machine Hours			Factory Overhead Rate Per hour	Total Product wise factory overhead cost
	Stamping Department	Planting Department	Total
Automobile bumpers	799	1169	1968	$48.36261	$95,177.62
Valve covers	564	713	1277	$48.36261	$61,759.05
Wheels	601	765	1366	$48.36261	$66,063.33
			4611		$223,000.00