Question

The total factory overhead for Bardot Marine Company is budgeted for the year at $522,500, divided into two departments: Fabrication, $190,000, and Assembly, $332,500. Bardot Marine manufactures two types of boats: speedboats and bass boats. The speedboats require one direct labor hour in Fabrication and four direct labor hours in Assembly. The bass boats require one direct labor hour in Fabrication and three direct labor hours 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

Answer 1

• All working forms part of the answer
• [a]

Fabrication department	10,000	direct labor hours
Assembly Department	35,000	direct labor hours

	SpeedBoats	Bass Boats	Total
Units	5,000	5,000	10,000
Hours per unit:
Fabrication department	1	1
Assembly Department	4	3
Total hours:
Fabrication department	5,000	5,000	10,000	Answer
Assembly Department	20,000	15,000	35,000	Answer

• [b]

Fabrication department	$                                    19.00	per dlhs
Assembly Department	$                                      9.50	per dlhs

Working		Fabrication department	Assembly Department
A	Total Overheads	$            190,000.00	$                         332,500.00
B	Total Direct Labor hours	10,000	35,000
C = A/B	Departmental factory Overhead rate	$                       19.00	$                                      9.50	Answers

• [c]

Speedbat	$              57.00	per unit
Bass Boat	$              47.50	per unit

	SpeedBoats	Bass Boats
Units	5,000	10,000
Fabrication:
Fabrication department hours per unit	1	1
Fabrication department rate	$                         19.00	$              19.00
Overhead cost allocated	$                         19.00	$              19.00
Assembly:
Assembly department hours per unit	4	3
Assembly department rate	$                           9.50	$                9.50
Overhead cost allocated	$                         38.00	$              28.50
Factory Overhead per unit	$                         57.00	$              47.50	Answers