Question

Multiple Production Department Factory Overhead Rates

The total factory overhead for Bardot Marine Company is budgeted for the year at $1,345,500, divided into two departments: Fabrication, $1,069,250, and Assembly, $276,250. Bardot Marine manufactures two types of boats: speedboats and bass boats. The speedboats require four direct labor hours in Fabrication and one direct labor hours in Assembly. The bass boats require three direct labor hours in Fabrication and four direct labor hours in Assembly. Each product is budgeted for 6,500 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

a

Particulars	Fabrication	Assembly
Speedboats hours	26,000	6,500
Bass boats hours	19,500	26,000
Budgeted hours	45,500	32,500

b

Particulars	Fabrication	Assembly
Estimated overhead	1,069,250	276,250
/ hours	45,500	32,500
Overhead rate	23.50	8.50

c

	Speed boat	Bass boat
Fabrication OH	94.00	70.50
Assembly	8.50	34.00
OH per unit	102.50	104.50