FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Performance Gloves, 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.
Performance Gloves uses the multiple production department factory overhead rate method of
allocating factory overhead costs. Its factory overhead costs were budgeted as follows:
Department Dollar Amount
Pattern Department $216,000
Cut and Sew Department 960,000
Total Overhead 1,176,000
The direct labor estimated for each production department was as follows:
Department Direct Labor Hours
Pattern Department 36,000
Cut and Sew Department 60,000
Total Direct Labor Hours 96,000
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 Small Glove Medium Glove Large Glove
Pattern Department .30 .35 .40
Cut and Sew Department .60 .50 .84
Total Direct Labor Hours per Unit .90 .85 1.24
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.

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