Question

The total factory overhead for Bardot Marine Company is budgeted for the year at $816,000, divided into two departments: Fabrication, $648,000, and Assembly, $168,000. Bardot Marine manufactures two types of boats: speedboats and bass boats. The speedboats require four direct labor hours in Fabrication and three direct labor hours in Assembly. The bass boats require two direct labor hours in Fabrication and three direct labor hours in Assembly. Each product is budgeted for 4,000 units of production for the year.

If 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

Answer:

a. Determine the total number of budgeted direct labor hours for the year in each department

Fabrication	24000 direct labor hours
Assembly	24000 direct labor hours

Fabrication :-

Speedboats = 4 hour * 4000 = 16000 hours

Bass boats = 2 hour * 4000 = 8000 hours

Total = 8000 + 16000= 24000 hours

Assembly:-

Speedboats = 3 hour * 4000 = 12000 hours

Bass boats = 3 hour * 4000 = 12000 hours

Total = 12000 + 12000 = 24000 hours

b. Determine the departmental factory overhead rates for both departments.

Fabrication	$27 per dlh
Assembly	$7 per dlh

Fabrication :-

Overhead/Direct labor hours

= $648000/24000 DL hours = $27

Assembly :-

Overhead/Direct labor hours

$168000/24000 DL hours = $7

c. Determine the factory overhead allocated per unit for each product using the department factory overhead allocation rates.

Speedboat:	$129 per unit
Bass boat:	$75 per unit

Speedboat:-

Fabrication = $27 * 4 hour = $108

Assembly = $7 * 3 hours = $21

Total = $108 + $21 = $129

Bass boat:-

Fabrication = $27 * 2 hour = $54

Assembly = $7* 3 hours = $21

Total = $54+ $21= $75