Question

Single Plantwide Factory Overhead Rate

Mozart Music Inc. makes three musical instruments: trumpets, tubas, and trombones. The budgeted factory overhead cost is $122,920. Factory overhead is allocated to the three products on the basis of direct labor hours. The products have the following budgeted production volume and direct labor hours per unit:

	Budgeted Production Volume		Direct Labor Hours Per Unit
Trumpets	2,800	units	0.8
Tubas	500		1.5
Trombones	1,400		1.0

If required, round all per unit answers to the nearest cent.

a. Determine the single plantwide factory overhead rate.
$ per direct labor hour

b. Use the factory overhead rate in (a) to determine the amount of total and per-unit factory overhead allocated to each of the three products.

	Total Factory Overhead Cost	Per Unit Factory Overhead Cost
Trumpets	$	$
Tubas
Trombones
Total	$

Answer 1

• All working forms part of the answer
• Requirement ‘a’

--Working and answer

	Budgeted Production Volume		Direct Labor Hours Per Unit	Total Direct Labor Hours
Trumpets	2,800	units	0.8	2,240
Tubas	500	units	1.5	750
Trombones	1,400	units	1	1,400
Total Direct Labor Hours (A)				4,390
Total Budgeted Factory Overhead cost (B)				$      122,920.00
Single Factory Plantwide Overhead rate (A/B)				$                28.00 = ANSWER

--Answer = $ 28 per direct labor hour

• Requirement ‘b’

--Working and Answer

	Total Direct Labor Hours	Overhead rate per DLHs	Total Factory Overhead cost	Total Units	Per Unit Factory Overhead cost
	[A]	[B]	[C = A x B]	[D]	[E = C/D]
	[Working column]	[Working column]	[Answer column]	[Working column]	[Answer column]
Trumpets	2,240	$                 28.00	$          62,720.00	2,800	22.4
Tubas	750	$                 28.00	$          21,000.00	500	$                    42.00
Trombones	1,400	$                 28.00	$         39,200.00	1,400	$                    28.00
Total	4,390		$        122,920.00 =ANSWER		$                    92.40 = ANSWER