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31 December, 00:40

The total factory overhead for Big Light Company is budgeted for the year at $807,500. Big Light manufactures two different products: night lights and desk lamps. Night lights are budgeted for 60,000 units. Each night light requires 1/2 hour of direct labor. Desk lamps are budgeted for 80,000 units. Each desk lamp requires 2 hours of direct labor. a. Determine the total number of budgeted direct labor hours for the year. direct labor hours b. Determine the single plantwide factory overhead rate using direct labor hours as the allocation base. Round your answer to two decimal places. $ per direct labor hour c. Determine the factory overhead allocated per unit for each product using the single plantwide factory overhead rate determined in (b). Round your answers to two decimal places. Night Lights $ per unit Desk Lamps $ per unit

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  1. 31 December, 04:20
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    Night Lights $ per unit 2.13

    Desk Lamps $ per unit 8.50

    Explanation:

    Determine total number of budgeted direct labour hours for the year

    total number of budgeted direct labor hours for the year is calculated

    = night lamp labor hours + desk lamp labor hours

    = (60000 * 1/2) + (80000 * 2)

    = 30000 + 160000

    = 190000

    calculated the single plant wide factory overhead rate

    factory overhead rate = total factory overhead / total number of budgeted unit

    = 807500 / 190000

    = 4.25 per labour hour

    calculate factory overhead cost per each unit

    night lamp = 4.25 * 1/2

    = 2.13 per unit

    desk lamp = 4.25 * 2

    = 8.50 per unit
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