Orange County Chrome Company manufactures three chrome-plated products—automobil
ID: 2493172 • Letter: O
Question
Orange County Chrome Company manufactures three chrome-plated products—automobile bumpers, valve covers, and wheels. These products are manufactured in two production departments (Stamping and Plating). The factory overhead for Orange County Chrome is $215,226.
The three products consume both machine hours and direct labor hours in the two production departments as follows:
The management of Orange County Chrome Company now plans to use the multiple production department factory overhead rate method. The total factory overhead associated with each department is as follows:
1
Stamping Department
$109,746.00
2
Plating Department
105,480.00
3
Total
$215,226.00
Amount Descriptions
Overhead Rates
1. Determine the multiple production department factory overhead rates, using direct labor hours for the Stamping Department and machine hours for the Plating Department.
Product Factory Overhead Costs
2. Determine the product factory overhead costs, using the multiple production department rates in (1).
1
Automobile Bumpers
Valve Covers
Wheels
2
3
4
Total
Direct Labor Hours Machine Hours Stamping Department Automobile bumpers 563 805 Valve covers 303 556 Wheels 340 596 1,206 1,957 Plating Department Automobile bumpers 174 1,168 Valve covers 177 713 Wheels 172 756 523 2,637 Total 1,729 4,594Explanation / Answer
1
Calculation of multiple production department factory overhead rates:
Stamping Department:
Total Factory Overhead Cost
$ 109,746
Total Direct Labor Hours
1206
Department Factory overhead rate = 109746 / 1206 =
$ 91
Per Direct Labor Hour
Plating Department:
Total Factory Overhead Cost
$ 105,480
Total Machine Hours
2637
Department Factory overhead rate = 105480 / 4594 =
$ 40
Per Machine Hour
2
Calculation of product factory overhead costs:
Automobile Bumpers
Valve Covers
Wheels
Stamping Department:
Direct Labor Hours (A)
563
303
340
Department Factory overhead rate (B)
$ 91
$ 91
$ 91
Stamping Department factory overhead costs = C = A*B
$ 51,233
$ 27,573
$ 30,940
Plating Department:
Machine Hours (D)
1168
713
756
Department Factory overhead rate (E)
$ 40
$ 40
$ 40
Stamping Department factory overhead costs F = D*E
$ 46,720
$ 28,520
$ 30,240
Product factory overhead costs = C+F
$ 97,953
$ 56,093
$ 61,180
1
Calculation of multiple production department factory overhead rates:
Stamping Department:
Total Factory Overhead Cost
$ 109,746
Total Direct Labor Hours
1206
Department Factory overhead rate = 109746 / 1206 =
$ 91
Per Direct Labor Hour
Plating Department:
Total Factory Overhead Cost
$ 105,480
Total Machine Hours
2637
Department Factory overhead rate = 105480 / 4594 =
$ 40
Per Machine Hour
2
Calculation of product factory overhead costs:
Automobile Bumpers
Valve Covers
Wheels
Stamping Department:
Direct Labor Hours (A)
563
303
340
Department Factory overhead rate (B)
$ 91
$ 91
$ 91
Stamping Department factory overhead costs = C = A*B
$ 51,233
$ 27,573
$ 30,940
Plating Department:
Machine Hours (D)
1168
713
756
Department Factory overhead rate (E)
$ 40
$ 40
$ 40
Stamping Department factory overhead costs F = D*E
$ 46,720
$ 28,520
$ 30,240
Product factory overhead costs = C+F
$ 97,953
$ 56,093
$ 61,180
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.