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Multiple Production Department Factory Overhead Rates The total factory overhead for Bardot Marine Company is budgeted...

Multiple Production Department Factory Overhead Rates

The total factory overhead for Bardot Marine Company is budgeted for the year at $411,750, divided into two departments: Fabrication, $276,750, and Assembly, $135,000. Bardot Marine manufactures two types of boats: speedboats and bass boats. The speedboats require one direct labor hour in Fabrication and three direct labor hours in Assembly. The bass boats require two direct labor hours in Fabrication and one direct labor hour in Assembly. Each product is budgeted for 4,500 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

Solutions

Expert Solution

Facts Given:

Fabrication Assembly Units
Speed Boat 1Hr 3Hr 4,500
Bass Boat 2Hr 1Hr 4,500

a)
Total number of budgeted direct labor hours in Fabrication Department:

For Speed Boat = 1Hr X 4,500 = 4,500Hrs
For Bass Boat = 2Hr X 4,500 = 9,000Hrs

Therefore, total direct labor hours in Fabrication Department = 4,500 + 9,000 = 13,500Hrs

Total number of budgeted direct labor hours in Assembly Department:

For Speed Boat = 3Hr X 4,500 = 13,500Hrs
For Bass Boat = 1Hr X 4,500 = 4,500Hrs

Therefore, total direct labor hours in Assembly Department = 13,500 + 4,500 = 18,000Hrs

b)
The factory overhead rates for Fabrication Department = Budgeted Factory Overhead / Total Labor Hours
= $276,750 / 13,500Hrs = $20.5 per dlh

The factory overhead rates for Assembly Department = Budgeted Factory Overhead / Total Labor Hours
= $135,000 / 18,000Hrs = $7.5 per dlh

c)
Factory OH of Speed Boat = (Fabricaion Dept rate X Direct labor Hrs) + (Assembly Dept rate X Direct labor Hrs)
= ($20.5 X 1Hr) + ($7.5 X 3Hr) = $20.5 + $22.5 = $42.5

Factory OH of Bass Boat = (Fabricaion Dept rate X Direct labor Hrs) + (Assembly Dept rate X Direct labor Hrs)
= ($20.5 X 2Hr) + ($7.5 X 1Hr) = $41 + $7.5 = $48.5


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