Question

he total factory overhead for Urban Styles, Inc., is budgeted for the year at $1,632,000. Urban Styles manufactures two types of men's pants: jeans and khakis. The jeans and khakis each require four direct labor hours for manufacture. Each product is budgeted for 12,000 units of production for the year. When required, round all per unit answers to the nearest cent. a. Determine the total number of budgeted direct labor hours for the year. direct labor hours b. Determine the single plantwide factory overhead rate. $ per dlh c. Determine the factory overhead allocated per unit for each product using the single plantwide factory overhead rate. Jeans $ per unit Khakis $ per unit?

Answer 1

Budgeted factory overhead for the year = 16,32,000

Direct labour hours for jeans & khakis = 4 Hrs per unit ( each)

Budgeted production for each pants = 12000 nos.

a) number of budgeted labour hours for the year

Jeans = 12000*4= 48000

   khakis = 12000*4 = 48000

Total = 96000

b) Single plant factory OH rate = Total overhead / Total labour hours

   = 16,32,000/ 96000

= 17 per labour hourr

c) factory ovehead allocated :

Jeans = 48000 * 17 =816000

   Khaki = 48000*17 = 816000

overhead rate per unit

jean = 816000/12000 = 68

khaki = 816000/12000 =68