Question

Orange County Chrome Company manufactures three chrome-plated products—automobile bumpers, valve covers, and wheels. These products are manufactured in two production departments (Stamping and Plating). The factory overhead for Orange County Chrome is $236,600.

The three products consume both machine hours and direct labor hours in the two production departments as follows:

	Direct Labor Hours	Machine Hours
Stamping Department
Automobile bumpers	557	801
Valve covers	296	558
Wheels	339	599
	1,192	1,958
Plating Department
Automobile bumpers	167	1,171
Valve covers	180	715
Wheels	172	758
	519	2,644
Total	1,711	4,602

	Required:
1.	Determine the single plantwide factory overhead rate, using each of the following allocation bases: (a) direct labor hours and (b) machine hours. Round your answers to two decimal places.
2.	Determine the product factory overhead costs, using (a) the direct labor hour plantwide factory overhead rate and (b) the machine hour plantwide factory overhead rate. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. Round your answers to the nearest dollar amount.

Answer 1

Determination the single plant wide factory overhead rate, using (a) direct labor hours
Particulars
Total Factory overheads	236600
Total Direct labor hours	1711
Factory overhead rate (236600/1711)	138.28
Determination the single plant wide factory overhead rate, using (b) Machine hours
Particulars
Total Factory overheads	236600
Total Machine hours	4602
Factory overhead rate (236600/4602)	51.41

Determination ofthe product factory overhead costs, using (a) the direct labor hour plantwide factory overhead rate
	Automobile bumpers	Valve covers	Wheels
Stamping Department	557	296	339
Plating Department	167	180	172
Total Labor hours	724	476	511
Product Factory overhead costs (Total Labor hours*138.28)	100116	65822	70662
Determination of the product factory overhead costs, using (b) the machine hour plantwide factory overhead rate
	Automobile bumpers	Valve covers	Wheels
Stamping Department	801	558	599
Plating Department	1171	715	758
Total Machine hours	1972	1273	1357
Product Factory overhead costs (Total machine hours*51.41)	101385	65448	69767

Particulars	Automobile bumpers	Valve covers	Wheels
Direct Labor hours	100116	65822	70662
Machine hours	101385	65448	69767