Asked by Kasongo Alain on Jul 02, 2024
Camper's Edge Factory produces two products: canopies and tents. The total factory overhead is budgeted at $750,000 for the year, divided between two departments: Cutting, $350,000, and Sewing, $400,000. Each canopy requires 2 direct labor hours in Cutting and 1 direct labor hour in Sewing. Each tent requires 1 direct labor hour in Cutting and 6 direct labor hours in Sewing. Production for the year is budgeted for 20,000 canopies and 10,000 tents. Determine the:
a. Total number of budgeted direct labor hours for the year in each department.
b. Departmental factory overhead rate for each department.
c. Factory overhead allocated per unit of each product, using the departmental factory overhead rates determined in (b).
Departmental Factory Overhead Rate
A rate used to allocate indirect manufacturing costs to different departments within a factory.
Direct Labor Hours
The total time workers spend producing goods or providing services that can be directly attributed to a specific product or service.
Cutting and Sewing
The process involved in the making of garments, which includes the cutting of fabric according to patterns and sewing them together to create clothing.
- Compute the per unit cost of factory overhead based on direct labor hours.
- Examine how overall factory overhead is distributed to the production of products based on both estimated and real production quantities.
Learning Objectives
- Compute the per unit cost of factory overhead based on direct labor hours.
- Examine how overall factory overhead is distributed to the production of products based on both estimated and real production quantities.
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