Kettle Factory produces two similar products - gloves and mittens.

The total plant budget is $1,050,000 with 600,000 estimated direct labor hours.

It is further estimated that glove production will require 375,000 direct labor hours and mitten production will require 225,000 direct labor hours.

Required:

a. Determine the single plant factory overhead rate based on direct labor hours.

b. How much is the factory overhead cost per pair of gloves if each pair requires 2 hours to produce?

c. How much is the factory overhead cost per pair of mittens if each pair takes 1.5 hours to produce?

d. How much total factory overhead will be allocated to gloves production if 187,500 pairs are budgeted and 190,000 pairs are actually produced during the period?

e. How much total factory overhead will be allocated to mittens production if 150,000 pairs are budgeted and 140,000 pairs are actually produced during the period?

Question

Business

Jarrett

9 May, 18:21

Kettle Factory produces two similar products - gloves and mittens.

The total plant budget is $1,050,000 with 600,000 estimated direct labor hours.

It is further estimated that glove production will require 375,000 direct labor hours and mitten production will require 225,000 direct labor hours.

Required:

a. Determine the single plant factory overhead rate based on direct labor hours.

b. How much is the factory overhead cost per pair of gloves if each pair requires 2 hours to produce?

c. How much is the factory overhead cost per pair of mittens if each pair takes 1.5 hours to produce?

d. How much total factory overhead will be allocated to gloves production if 187,500 pairs are budgeted and 190,000 pairs are actually produced during the period?

e. How much total factory overhead will be allocated to mittens production if 150,000 pairs are budgeted and 140,000 pairs are actually produced during the period?

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Answers (1)

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Kenneth Gillespie · Answer 1

Instructions are listed below.

Explanation:

Giving the following information:

The total plant budget is $1,050,000 with 600,000 estimated direct labor hours.

Glove production will require 375,000 direct labor hours.

Mitten production will require 225,000 direct labor hours.

A) Estimated manufacturing overhead rate = total estimated overhead costs for the period / total amount of allocation base

Estimated manufacturing overhead rate = (1,050,000/600,000) = $1.75 per direct labor hour

B) Allocated MOH = Estimated manufacturing overhead rate * Actual amount of allocation base

Allocated MOH = 1.75*2 = $3.5

C) Allocated MOH = 1.75*1.5 = $2.63

D) Total direct labor = 187,500*2 = 375,000 hours

Allocated MOH = 1.75*375,000 = $656,250

E) Total direct labor = 150,000*1.5 = 225,000 hours

Allocated MOH = 1.75 * 225,000 = $393,750