Question

Single plantwide factory overhead rate Bach Instruments Inc. makes three musical instruments: flutes, clarinets, and oboes. The budgeted factory overhead cost is $127,800. Overhead is allocated to the three products on the basis of direct labor hours. The products have the following budgeted production volume and direct labor hours per unit:_______.

Budgeted Production Volume Direct Labor Hours Per Unit
Flutes 2,100 units 0.8
Clarinets 800 1.4
Oboes 1,300 1.0
If required, round all per unit answers to the nearest cent.
a. Determine the single plantwide overhead rate.
$ per direct labor hour
b. Use the overhead rate in (a) to determine the amount of total and per-unit overhead allocated to each of the three products.
Total
Factory Overhead Cost Per Unit
Factory Overhead Cost
Flutes $ $
Clarinets
Oboes
Total $

Answer 1

A.$31.2 per hour

B. Factory Overhead Cost Per Unit

Flutes $24.96

Clarinets $43.68

Oboes $32.74

Factory Overhead Cost

Flutes 52,416

Clarinets 34,944

Oboes 40,560

Step-by-step explanation:

A. Calculation to Determine the single plantwide overhead rate.

First step is to calculate the Total Hours

Total Direct Labor Hours

Flutes 2100 units *0.8 hour per unit= 1,680

Clarinets 800 units *1.4 hours per unit = 1,120

Oboes 1300 units *1.0 hour per unit= 1,300

Total Hours 4,100

Now let calculate the Plantwide overhead rate using this formula

Plantwide overhead rate = Total Overhead Cost / Total labor hours

Let plug in the formula

Plantwide overhead rate=$127,800/4,100

Plantwide overhead rate=$31.2 per hour

Therefore Plantwide overhead rate will be $31.2 per hour

B. Calculation to determine the amount of total and per-unit overhead allocated to each of the three products.

Product Total Labor Hours Total Overhead Overhead Per Unit

Flutes 1,680 52,416 (1,680*31.2) $24.96 (52416/2100)

Clarinets 1,120 34,944(1,120*31.2) $43.68 (34,944/800)

Oboes 1,300 40,560

(1,300*31.2) $32.74 (40,560/1,300)

Total 4,100 127,920 $101.38

Therefore Factory Overhead Cost Per Unit and Factory Overhead Cost Will be:

Factory Overhead Cost Per Unit

Flutes $24.96

Clarinets $43.68

Oboes $32.74

Factory Overhead Cost

Flutes 52,416

Clarinets 34,944

Oboes 40,560