Question

Boat Builders incorporated budgets overhead cost of $1,680,000 for the year, of this amount, $960,000 is traceable to the Assembly department and $720,000 is traceable to the Finishing department. The company manufactures two types of boats: Fishing and Yachts. Budgeted direct labor hours for the Fishing model are 28 in Assembly and 4 in Finishing. Budgeted direct labor hours for the Yacht model are 36 in Assembly and 12 in Finishing. The company budgets production of 400 units of the Fishing model and 400 units of the Yacht model for the year. Compute each department's total number of budgeted direct labor hours for the year. Multiple Choice

A. Assembly: 14,400 DLH; Finishing: 6,400 DLH.
B. Assembly: 6,400 DLH; Finishing: 25,600 DLH.
C. Assembly: 25, 00DLH; Finishing: 6,400 DLH.
D. Assembly:19,200 DLH; Finishing: 12,800 DLH.
E. Assembly: 12,800DLH : Finishing: 19,200 DLH.

Answer 1

The total number of budgeted direct labor hours for the Assembly department is 11,200 hours for the Fishing model and 14,400 hours for the Yacht model. The total number of budgeted direct labor hours for the Finishing department is 1,600 hours for the Fishing model and 4,800 hours for the Yacht model.

Step-by-step explanation:

The total number of budgeted direct labor hours for the Assembly department can be calculated by multiplying the budgeted direct labor hours per unit for each model by the number of units produced for each model:

For the Fishing model: 400 units x 28 hours = 11,200 hours

For the Yacht model: 400 units x 36 hours = 14,400 hours

Therefore, the total number of budgeted direct labor hours for the Assembly department is 11,200 hours for the Fishing model and 14,400 hours for the Yacht model.

The total number of budgeted direct labor hours for the Finishing department can be calculated in the same way:

For the Fishing model: 400 units x 4 hours = 1,600 hours

For the Yacht model: 400 units x 12 hours = 4,800 hours

Therefore, the total number of budgeted direct labor hours for the Finishing department is 1,600 hours for the Fishing model and 4,800 hours for the Yacht model.