Question

Single Plantwide Factory Overhead Rate

The total factory overhead for Bardot Marine Company is budgeted for the year at $1,710,000. Bardot Marine manufactures two types of boats: speedboats and bass boats. The speedboat and bass boat each require four direct labor hours for manufacture. Each product is budgeted for 9,000 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	$ per unit
Bass boat	$ per unit

Answer 1

Solution:

Answer 1. Calculation of No. of Budgeted Direct Labor Hours for the year:

Total Budgeted Direct Labor hours = DLH required per unit * Total budgeted units

Budgeted Direct Labour Hours for speed boats = 4 Hours * 9000 Units = 36,000 Hours

Budgeted Direct Labour Hours for bass boats = 4 Hours * 9000 Units = 36,000 Hours

Total Budgeted Direct Labor Hours = 36,000 Hours + 36,000 Hours

= 72,000 Direct Labor Hours

Answer 2. Calculation of  single plantwide factory overhead rate.

Single Plant wide Overhead Rate = Total Budgeted Overhead / Total Budgeted Direct Labor Hours

= $1,710,000 / 72,000

= $23.75 per DLH

Answer 3. Calculation of actory overhead allocated per unit for each product

Factory Overhead allocated per unit = DLH required per unit * Single plantwide factory overhead rate

As calculated above, single plantwide factory overhead rate = $23.75 Per DLH

Speedboats

Direct Labor hours required for each unit = 4 DLH

Therefore, Factory overhead allocated per unit = 4 DLH * $23.75 per DLH

= $95 per Unit

Bass boats

Direct Labor hours required for each unit = 4 DLH

Therefore, Factory overhead allocated per unit = 4 DLH * $23.75 per DLH

= $95 per Unit