Question

(#18-9) Single Plantwide Factory Overhead Rate Spotted Cow Dairy Company manufactures three products—whole milk, skim milk,...

(#18-9) Single Plantwide Factory Overhead Rate

Spotted Cow Dairy Company manufactures three products—whole milk, skim milk, and cream—in two production departments, Blending and Packing. The factory overhead for Spotted Cow Dairy is $264,600.

The three products consume both machine hours and direct labor hours in the two production departments as follows:

Direct Labor Hours Machine Hours
Blending Department
Whole milk 290 730
Skim milk 310 670
Cream 250 270
850 1,670
Packing Department
Whole milk 340 390
Skim milk 540 480
Cream 160 160
1,040 1,030
Total 1,890 2,700

Required:

1. Determine the single plantwide factory overhead rate, using each of the following allocation bases: (a) direct labor hours and (b) machine hours. If required, round all amounts to the nearest dollar.

a. Direct labor overhead rate $ per direct labor hour
b. Machine hour overhead rate $ per machine hour

2. Determine the product factory overhead costs, using (a) the direct labor hour plantwide factory overhead rate and (b) the machine hour plantwide factory overhead rate.

Whole Milk Skim Milk Cream
Direct labor hours $ $ $
Machine hours $ $ $
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