Multiple Production Department Factory Overhead Rate Method Handy Leather, Inc., produces three sizes of sports gloves: small, medium, and large. A glove pattern is first stenciled onto leather in the Pattern Department. The stenciled patterns are then sent to the Cut and Sew Department, where the glove is cut and sewed together. Handy Leather uses the multiple production department factory overhead rate method of allocating factory overhead costs. Its factory overhead costs were budgeted as follows: Pattern Department overhead Cut and Sew Department overhead Total The direct labor estimated for each production department was as follows: Pattern Department 2,000 direct labor hours Cut and Sew Department 2,500 Total 4,500 direct labor hours $118,000 195,000 $313,000 Direct labor hours are used to allocate the production department overhead to the products. The direct labor hours per unit for each product for each production department were obtained from the engineering records as follows: Production Departments Pattern Department Cut and Sew Department Direct labor hours per unit Small Glove Medium Glove 0.05 0.07 0.12 per unit per unit 0.06 0.09 0.15 Large Glove 0.07 0.11 0.18 If required, round all per unit answers to the nearest cent. a. Determine the two production department factory overhead rates. Pattern Department per dlh per dlh Cut and Sew Department b. Use the two production department factory overhead rates to determine the factory overhead per unit for each product. Small glove per unit Medium glove Large glove

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 5E: Handy Leather, Inc., produces three sizes of sports gloves: small, medium, and large. A glove...
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Multiple Production Department Factory Overhead Rate Method costs were budgeted as follows: The direct labor estimated for each production department was as follows: Pattern Department 2,000 direct labor hours Cut and Sew Department, 2, 500 Total direct labor hours records as follows: If required, round all per unit answers to the nearest cent, a. Determine the two production department factory overhead rates. b. Use the two production department factory overhead rates to determine the factory overhead per unit for each product.

Multiple Production Department Factory Overhead Rate Method
Handy Leather, Inc., produces three sizes of sports gloves: small, medium, and large. A glove pattern is first stenciled onto leather in the Pattern Department. The stenciled patterns are then sent to the Cut and
Sew Department, where the glove is cut and sewed together. Handy Leather uses the multiple production department factory overhead rate method of allocating factory overhead costs. Its factory overhead
costs were budgeted as follows:
Pattern Department overhead
Cut and Sew Department overhead
Total
The direct labor estimated for each production department was as follows:
Pattern Department
2,000 direct labor hours
Cut and Sew Department
2,500
Total
4,500 direct labor hours
Direct labor hours are used to allocate the production department overhead to the products. The direct labor hours per unit for each product for each production department were obtained from the engineering
records as follows:
Production Departments
Pattern Department
Cut and Sew Department
Direct labor hours per unit
If required, round all per unit answers to the nearest cent.
a. Determine the two production department factory overhead rates.
Pattern Department
per dlh
Cut and Sew Department
per dlh
b. Use the two production department factory overhead rates to determine the factory overhead per unit for each product.
Small glove
per unit
Medium glove
Large glove
$
$
Small Glove Medium Glove
$
$118,000
195,000
$313,000
0.05
0.07
0.12
per unit
per unit
0.06
0.09
0.15
Large Glove
0.07
0.11
0.18
Transcribed Image Text:Multiple Production Department Factory Overhead Rate Method Handy Leather, Inc., produces three sizes of sports gloves: small, medium, and large. A glove pattern is first stenciled onto leather in the Pattern Department. The stenciled patterns are then sent to the Cut and Sew Department, where the glove is cut and sewed together. Handy Leather uses the multiple production department factory overhead rate method of allocating factory overhead costs. Its factory overhead costs were budgeted as follows: Pattern Department overhead Cut and Sew Department overhead Total The direct labor estimated for each production department was as follows: Pattern Department 2,000 direct labor hours Cut and Sew Department 2,500 Total 4,500 direct labor hours Direct labor hours are used to allocate the production department overhead to the products. The direct labor hours per unit for each product for each production department were obtained from the engineering records as follows: Production Departments Pattern Department Cut and Sew Department Direct labor hours per unit If required, round all per unit answers to the nearest cent. a. Determine the two production department factory overhead rates. Pattern Department per dlh Cut and Sew Department per dlh b. Use the two production department factory overhead rates to determine the factory overhead per unit for each product. Small glove per unit Medium glove Large glove $ $ Small Glove Medium Glove $ $118,000 195,000 $313,000 0.05 0.07 0.12 per unit per unit 0.06 0.09 0.15 Large Glove 0.07 0.11 0.18
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ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub