Question

The total factory overhead for Bardot Marine Company is budgeted for the year at $600,000 divided into two departments: Fabrication, $420,000, and Assembly, $180,000. Bardot Marine manufactures two types of boats: speedboats and bass boats. The speedboats require 8 direct labor hours in Fabrication and 4 direct labor hours in Assembly. The bass boats require 4 direct labor hours in Fabrication and 8 direct labor hours in Assembly. Each product is budgeted for 250 units of production for the year.Required:a. Determine the total number of budgeted direct labor hours for the year in each department.b. Determine the departmental factory overhead rates for both departments.c. Determine the factory overhead allocated per unit for each product using the department factory overhead allocation rates.

Answer 1

Fabrication, $420,000 / 3,000 = $140 per hour

Assembly, $180,000 / 3,000 = $60 per hour

speedboats

• 8 direct labor hours in Fabrication x 250 = 2,000 hours
• 4 direct labor hours in Assembly x 250 = 1,000 hours

bass boats

• 4 direct labor hours in Fabrication x 250 = 1,000 hours
• 8 direct labor hours in Assembly x 250 = 2,000 hours

a. Determine the total number of budgeted direct labor hours for the year in each department.

3,000 labor hours in Fabrication and 3,000 labor hours in Assembly

b. Determine the departmental factory overhead rates for both departments.

Fabrication = $140 per hour

Assembly = $60 per hour

c. Determine the factory overhead allocated per unit for each product using the department factory overhead allocation rates.

speedboats

• Fabrication $1,120
• Assembly $240

bass boats

• Fabrication $560
• Assembly $480