Question
In: Accounting
Single plant wide factory rate: Spotted Cow Dairy Company manufactures three products-whole milk, skin milk, and...
Single plant wide factory rate: Spotted Cow Dairy Company manufactures three products-whole milk, skin milk, and cream- in two production departments, blending and packaging. The factory overhead for Spotted Dairy is $356,400.
The three products consume both machine hour and direct labor hours in the two production departments as follows:
Blending department. Direct labor hr. Machine hr.
Whole milk. 300 880
skin milk. 320. 800
cream. 250. 330
870. 2,010
Packing Department
Whole Milk. 370. 490
skin milk. 580. 610
cream. 160 190
Total. 1,110. 1,290
Required: 1). Determine the single plant wide factory overhead rate, using each of the following allocated bases: (a) direct labor hours and (b) machine hours. If required, round all amounts to the nearest dollar.
a. Direct labor overhead rate. $ Per direct labor hour
B. Machine hours. $. Per machine hour
2). Determine the product factory overhead cost,using (a) the direct labor hour plantwide factory overhead rate and (b) the machine hour plantwide factor overhead rate.
Whole Milk. Skin Milk Cream
Direct labor hours. $. $. $
Machine Hours. $. $. $
Solutions
Expert Solution
(1) Single plant wide factory overhead rate :-
(a) Using Direct Labour Hrs :-
Total O/H = $356400
Total Labour Hrs = 1980 hrs
O/H Rate = 356400/1980 Hrs = $180
(b) Using Machine Hrs :-
Total machine hrs = 3300 hrs
O/H Rate = 356400/3300 Hrs = $108
(2) Product factory overhead cost:-
(a) Using Direct Labour Hrs :-
|
Whole Milk |
Skin Milk |
Cream |
|
|
Direct Labour Hrs (A) |
670 |
900 |
410 |
|
O/H Rate (B) |
180 |
180 |
180 |
|
Total O/H (A * B) |
120600 |
162000 |
73800 |
(b) Using Machine Hrs :-
|
Whole Milk |
Skin Milk |
Cream |
|
|
Machine Hrs (A) |
1370 |
1410 |
520 |
|
O/H Rate (B) |
108 |
108 |
108 |
|
Total O/H (A * B) |
147960 |
152280 |
56160 |
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