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Single Plantwide Factory Overhead Rate The total factory overhead for Bardot Marine Company is budgeted for...

Single Plantwide Factory Overhead Rate

The total factory overhead for Bardot Marine Company is budgeted for the year at $1,305,000. Bardot Marine manufactures two types of boats: speedboats and bass boats. The speedboat and bass boat each require six direct labor hours for manufacture. Each product is budgeted for 7,500 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.
direct labor hours

b. Determine the single plantwide factory overhead rate.
per dlh

c. Determine the factory overhead allocated per unit for each product using the single plantwide factory overhead rate.

Speedboat
Bass boat

Hercules Inc. manufactures elliptical exercise machines and treadmills. The products are produced in its Fabrication and Assembly production departments. In addition to production activities, several other activities are required to produce the two products. These activities and their associated activity rates are as follows:

Activity Activity Rate
Fabrication $21 per machine hour
Assembly $16 per direct labor hour
Setup $45 per setup
Inspecting $25 per inspection
Production scheduling $17 per production order
Purchasing $14 per purchase order

The activity-base usage quantities and units produced for each product were as follows:

Activity Base Elliptical Machines Treadmill
Machine hours 1,729 1,020
Direct labor hours 440 172
Setups 59 18
Inspections 745 447
Production orders 71 14
Purchase orders 175 107
Units produced 293 196

Use the activity rate and usage information to determine the total activity cost and activity cost per unit for each product. If required, round the per unit answers to the nearest cent.

Solutions

Expert Solution

Question 1 )

a)Total Budgeted direct labor hours :

Hours per unit * Number of units = Total hours required
Speedboats 6 7500 45000
Bass boats 6 7500 45000
Total budgeted direct labor hours 90000

b)

Plantwide overhead rate =Estimated overhead /estimated DLH

                = 1305000 /90000

                   = $ 14.5 PER dlh

c)

Hours per unit * Overhead rate per hour = Overhead allocated per unit
Speedboats 6 14.5 87
Bass boats 6 14.5 87

Question 2)

Elliptical Machines (Activity rate*Activity usage) [i] Treadmill (Activity rate*Activity usage) [ii] Total activity cost [i+ii]
Fabrication 21* 1729=36309 21*1020=21420 57729
Assembly 16*440= 7040 16*172= 2752 9792
set up 45*59=2655 45*18= 810 3465
Inspecting 25*745=18625 25*447=11175 29800
Production scheduling 17*71=1207 17*14=238 1445
purchasing 14*175=2450 14*107=1498 3948
Total 68286 37893 106179
Number of units 293 196
activity cost per unit 68286/293= 233.06 193.33

Total activity cost = 106179


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