Question

The total factory overhead for Bardot Marine Company is budgeted for the year at $1,038,750, divided into two departments: Fabrication, $645,000, and Assembly, $393,750. Bardot Marine manufactures two types of boats: speedboats and bass boats. The speedboats require four direct labor hours in Fabrication and three direct labor hours in Assembly. The bass boats require two direct labor hours in Fabrication and four direct labor hours in Assembly. Each product is budgeted for 5,000 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 in each department.

Fabrication	direct labor hours
Assembly	direct labor hours

b. Determine the departmental factory overhead rates for both departments.

Fabrication	$ per dlh
Assembly	$ per dlh

c. Determine the factory overhead allocated per unit for each product using the department factory overhead allocation rates.

Speedboat:	$ per unit
Bass boat:	$ per unit

Answer 1

Calculate following :

a. Determine the total number of budgeted direct labor hours for the year in each department.

Fabrication	5000*4+5000*2 =30000 direct labour hours
Assembly	5000*3+5000*4=35000 direct labour hours

b. Determine the departmental factory overhead rates for both departments.

Fabrication	645000/30000 = $21.50 per dlh
Assembly	393750/35000= $11.25 per dlh

c. Determine the factory overhead allocated per unit for each product using the department factory overhead allocation rates.

Speedboat	(5000*4*21.50+5000*3*11.25/5000)= 119.75 per unit
Bass Boad	(5000*2*21.50+5000*4*11.25/5000)= 88 per unit