Kettle Factory produces two similar products - gloves and mittens. The total pla
ID: 2496746 • Letter: K
Question
Kettle Factory produces two similar products - gloves and mittens. The total plant budget is $1,050,000 with 600,000 estimated direct labor hours. It is further estimated that glove production will require 375,000 direct labor hours and mitten production will require 225,000 direct labor hours.
a. Determine the single plant factory overhead rate based on direct labor hours.
$ per direct labor hour
b. How much is the factory overhead cost per pair of gloves if each pair requires 2 hours to produce?
$
c. How much is the factory overhead cost per pair of mittens if each pair takes 1.5 hours to produce?
$
d. How much total factory overhead will be allocated to gloves production if 187,500 pairs are budgeted and 190,000 pairs are actually produced during the period?
$
e. How much total factory overhead will be allocated to mittens production if 150,000 pairs are budgeted and 140,000 pairs are actually produced during the period?
Explanation / Answer
ANSWER a
single plant factory overhead rate based on direct labor hours => 1050000/600000 => $1.75 per direct labor hour
ANSWER b
Gloves units => 375000 /2 => 187500 units
overahead for gloves => 375000*1.75 => $ 656250
factory overhead cost per pair of gloves=> 656250/187500 => $3.5 per unit
Anwer c
mittens units => 225000/1.5 => 150000 units
overhead fo rmittens => 1.75 *225000 => 393750
factory overhead cost per pair of mittens is => 393750 / 150000 => $2.625 per unit
Answer d
total factory overhead will be allocated to gloves => 190000 * 3.5 => $665000
Answer e
total factory overhead will be allocated to mittens => 140000 * 2.625 => $367500
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