Question

2. Multiple production department factory overhead rates Obj. 3 The total factory overhead for Diva-nation is budgeted for the year at $180,000. divided into two departments: Cutting. $60,000, and Sewing. $120,000. Diva-nation manufactures two types of men's pants: jeans and khakis. The jeans require 0.04 direct labor hour in Cutting and 0.06 direct labor hour in Sewing. The khakis require 0.06 direct labor hour in Cutting and 0.04 direct labor hour in Sewing. Each product is budgeted for 20,000 units of production for the year. Determine

Answer 1

To determine the multiple production department factory overhead rates for Diva-nation, divide the total factory overhead budgeted for the year by the total direct labor hours required for each department. The answer is $10.

Step-by-step explanation:

To determine the multiple production department factory overhead rates for Diva-nation, you need to divide the total factory overhead budgeted for the year by the total direct labor hours required for each department. For Cutting, the budgeted overhead is $60,000, and the jeans require 0.04 direct labor hour, so the overhead rate for Cutting is $60,000 / (20,000 * 0.04) = $7.50 per direct labor hour.

For Sewing, the budgeted overhead is $120,000, and the jeans require 0.06 direct labor hour, so the overhead rate for Sewing is $120,000 / (20,000 * 0.06) = $10 per direct labor hour.