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 is budgeted for 60,000 units. Each night light requires 1/2 hour of direct labor. Desk lamps is budgeted for 80,000 units. Each desk lamp requires 2 hours of direct labor. 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
(c) the factory overhead allocated per unit for each product using the single plantwide factory overhead rate calculated in (b).

Question

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 is budgeted for 60,000 units.  Each night light requires 1/2 hour of direct labor. Desk lamps is budgeted for 80,000 units.  Each desk lamp requires 2 hours of direct labor. 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
(c) the factory overhead allocated per unit for each product using the single plantwide factory overhead rate calculated in (b).

Quizplus · Accepted Answer

The Answer of 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 is budgeted for 60,000 units.  Each night light requires 1/2 hour of direct labor. Desk lamps is budgeted for 80,000 units.  Each desk lamp requires 2 hours of direct labor. 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
(c) the factory overhead allocated per unit for each product using the single plantwide factory overhead rate calculated in (b).

The Total Factory Overhead for Big Light Company Is Budgeted