Question

Multiple Production Department Factory Overhead Rates

The total factory overhead for Bardot Marine Company is budgeted for the year at $519,000, divided into two departments: Fabrication, $451,500, and Assembly, $67,500. Bardot Marine manufactures two types of boats: speedboats and bass boats. The speedboats require four direct labor hours in Fabrication and one direct labor hour in Assembly. The bass boats require three direct labor hours in Fabrication and one direct labor hour in Assembly. Each product is budgeted for 3,000 units of production for the year.

If 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

• Requirement [a]

	SpeedBoats	Bass Boats	Total
Units	3,000	3,000	6,000
Hours per unit:
Fabrication department	4	3
Assembly Department	1	1
Total hours:
Fabrication department	12,000	9,000	21,000	Answer
Assembly Department	3,000	3,000	6,000	Answer

• [b]

Working		Fabrication department	Assembly Department
A	Total Overheads	$            451,500.00	$                            67,500.00
B	Total Direct Labor hours	21,000	6,000
C = A/B	Departmental factory Overhead rate	$                       21.50	$                                    11.25	Answers

• [c]

Speedbat	$              97.25	per unit
Bass Boat	$              75.75	per unit

--Working

	SpeedBoats	Bass Boats
Units	3,000	6,000
Fabrication:
Fabrication department hours per unit	4	3
Fabrication department rate	$                         21.50	$              21.50
Overhead cost allocated	$                         86.00	$              64.50
Assembly:
Assembly department hours per unit	1	1
Assembly department rate	$                         11.25	$              11.25
Overhead cost allocated	$                         11.25	$              11.25
Factory Overhead per unit	$                         97.25	$              75.75