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Homework answers / question archive / Single plantwide factory overhead rate  Bach Instruments Inc

Single plantwide factory overhead rate  Bach Instruments Inc

Accounting

Single plantwide factory overhead rate 
Bach Instruments Inc. makes three musical instruments: flutes, clarinets, and oboes. The budgeted factory overhead cost is $118,400. Overhead is allocated to the three products on the basis of direct labor hours. The products have the following budgeted production volume and direct labor hours per unit: 
Budgeted Production Direct Labor Hours Per Volume Unit 
Flutes 2,300 units 0.8 Clarinets 400 1.4 Oboes 1,300 1.0 If required, round all per unit answers to the nearest cent. 
a. Determine the single plantwide overhead rate. 

per direct labor hour 
b. Use the overhead rate in (a) to determine the amount of total and per-unit overhead allocated to each of the three products. 
Total Per Unit Factory Overhead Cost Factory Overhead Cost 
Flutes Clarinets Oboes Total 


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T Check My Work 
a. First calculate: Budgeted Production Volume x Direct Labor Hours per Unit = Direct Labor Hours per Product. Add all product hours for total direct labor hours. Next: Total Budgeted Factory Overhead 4- Total Budgeted Plantwide Allocation Base = Single Plantwide Factory Overhead Rate 
b. Overhead Rate in (a) x Direct Labor Hours for each Product = Overhead for each. Add all overhead amounts to obtain the total. Divide individual overhead amounts by budgeted production volume for each product to obtain overhead per unit. 
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