The total factory overhead for Big Light Company is budgeted for the year at $80

Question

The total factory overhead for Big Light Company is budgeted for the year at $800,000. Big Light manufactures two different products - night lights and desk lamps. Night lights is budgeted for 30,000 units, each unit requiring two hours of direct labor per unit. Desk lamps, on the other hand, is budgeted for 40,000 units, each unit requiring two and a half hours of direct labor per unit.
Determine (a) the total number of budgeted direct labor hours for year, (b) the single plantwide factory overhead rate using direct labor hours as the allocation base, and (c) the factory overhead allocated per unit for each product using the single plantwide factory overhead rate using direct labor hours as the allocation base.

Explanation / Answer

FROM PARS A) AND B) ABOVE

NO.OF UNITS OF NIGHT LIGHTS BUDGETED=30000

OVER HEADS ALLOCATION FOR NIGHT LAMPS FACTORY = [3/8][800000]=300000 HRS

HENCE OVERHEAD HOURS PER UNIT OF NIGHT LIGHT = 300000/30000=10 HRS.PER UNIT

NO.OF UNITS OF DESK LAMPS BUDGETED=40000

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.