The total factory overhead for Diva-nation is budgeted for the year at $180,000,
ID: 2481459 • Letter: T
Question
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 (dlh) 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. A. Determine the total number of budgeted direct labor hours for the year in each department. Cutting direct labor hours Sewing direct labor hours B. Determine the departmental factory overhead rates for both departments. When required, round all per-unit answers to the nearest cent. Cutting per dlh Sewing per dlh C. Determine the factory overhead allocated per unit for each product using the department factory overhead allocation rates. When required, round all per-unit answers to the nearest cent. Jeans per unit Khakis per unit
Explanation / Answer
Solution:
A)
Cutting
Sewing
Budgeted Units
20,000 Units
20,000 Units
Direct Labor Hours Per Unit for Jeans
0.04
0.06
Total Direct Labor Hours for Jeans
800
1200
Direct Labor Hours per Unit for Khakis
0.06
0.04
Total Direct Labor Hours for Khakis
1200
800
Total Direct Labor Hours
2000
2000
B) Departmental factory overhead rates for both departments
Cutting
Sewing
Total Factory Overhead
$60,000
$120,000
Total Direct Labor Hours
2000
2000
Departmental Factory Overhead Rate
per direct labor hour
$30
$60
C)
Jeans Per Unit
Khakhi Per Unit
Overhead Rate Cutting Department
$30
$30
Direct Labor Hour per unit
0.04
$0.06
Cutting Cost Per Unit
$1.20
$1.80
Overhead Rate Sewing Department
$60
$60
Direct Labor Hour per unit
0.06
$0.04
Sewing Cost Per Unit
$3.60
$2.40
Total Cost Per Unit
$4.80
$4.20
Cutting
Sewing
Budgeted Units
20,000 Units
20,000 Units
Direct Labor Hours Per Unit for Jeans
0.04
0.06
Total Direct Labor Hours for Jeans
800
1200
Direct Labor Hours per Unit for Khakis
0.06
0.04
Total Direct Labor Hours for Khakis
1200
800
Total Direct Labor Hours
2000
2000
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