Chapter 4 Excercise Question 2 .susi produces lrps and home lighting fbares s mo

Question

Chapter 4 Excercise Question 2

.susi produces lrps and home lighting fbares s most popular productis Ousned sluminum diesk lama. This lamp is made trom componens shaped in te fabricating depamment and 55embled h 3 5sembly depertment. Infonmation relsted o e 30,000 desk lamps produzed annueilty ollow 5270,000 Fabricatirg deparament a.c0O DLHx51 per DLH Assembly depatmen: (16200 DLHx 3A9 per DLHO 5168,000 5469.800 Faoricating depsromen 0250 MH Expected cverhesd cos: and related data for the wo production departments tollow 330.000 5410,000 Required 2. Decenmine the oca manuecturing cos: per unit: or theauminum desk lamp usng he plancwide overhesd rate (Round the Intermedlate caloulations to 2 deolmal places for overhead costs) . Compute deparmental overhesd rates besed on maahine hours in theabricating depariment and d rec: labor hours in he assembly depetmentRound your answers to 2 deolmal places.) ccs: par unit for he aluminum desk lamps (Round the Intermeclate oaloulations to 2 deolmal places for overhead oosts

Explanation / Answer

1) Determine the plantwide overhead rate for Laval using direct labor hours as a base. Estimated overhead costs ($330,000 + $410,000) $740,000.00 $1.54 per direct labor hour Estimated direct labor hours(150,000 + 330,000) 480000 2) Determine the total manufacturing cost per unit for the aluminum desk lamp using the plantwide overhead rate. Direct materials $270,000.00 Direct labor Fabricating department (8,000 DLH × $21 per DLH) $168,000.00 Assembly department (16,200 DLH × $29 per DLH) $469,800.00 Total Direct Labour $637,800.00 Overhead Fabricating Department: 8,000 DLH x $1.54 $12,333.33 Assembly Department : 16200 DLH x $1.54 $24,975.00 Total overhead costs $37,308.33 Total manufacturing costs $945,108.33 Units Produced 30000 Manufacturing cost per unit $31.50 per unit 3) Compute departmental overhead rates based on machine hours in the fabricating department and direct labor hours in the assembly department. (Round your answers to 2 decimal places.) Departmental overhead rate Fabricating Department: $330,000 / 152,000 MH $2.17 MH Assembly Department: $410,000 / 330,000 DLH $1.24 DLH 4) Use departmental overhead rates from requirement 3 to determine the total manufacturing cost per unit for the aluminum desk lamps. Direct materials $270,000.00 Direct labor Fabricating department (8,000 DLH × $21 per DLH) $168,000.00 Assembly department (16,200 DLH × $29 per DLH) $469,800.00 Total Direct Labour $637,800.00 Overhead Fabricating Department: 14,400 MH x $2.17 $31,263.16 Assembly Department : 16,200 DLH x $1.24 $20,127.27 Total overhead costs $51,390.43 Total manufacturing costs $959,190.43 Units Produced 30000 Manufacturing cost per unit $31.97 per unit

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