Respuesta :
a)
Determine the single plant wide factory overhead rate.
\begin{array}{c}\\\left. \begin{array}{l}\\{\rm{Single plant wide }}\\\\{\rm{factory overhead rate}}\\\end{array} \right\} = \frac{{{\rm{Total factory overhead}}}}{{{\rm{Total processing hours}}}}\\\\ = \frac{{\$ 153,000}}{{2,550}}\\\\ = \$ 60{\rm{ per processing hour}}\\\end{array}
Singleplantwide
factoryoverheadrate
⎭
⎪
⎪
⎬
⎪
⎪
⎫
=
Totalprocessinghours
Totalfactoryoverhead
=
2,550
$153,000
=$60perprocessinghour
Therefore, single plant wide factory overhead rate is $60 per processing hour.
Workings:
Calculation of total factory overhead rate:
\begin{array}{c}\\\left. \begin{array}{l}\\{\rm{Total factory }}\\\\{\rm{overhead}}\\\end{array} \right\}{\rm{ = }}\left( \begin{array}{l}\\{\rm{Factory depreciation + Indirect labor }}\\\\{\rm{ + Factory electricity + Indirect material}}\\\end{array} \right)\\\\ = \$ 31,360 + \$ 78,400 + \$ 7,840 + \$ 35,400\\\\ = \$ 153,000\\\end{array}
Totalfactory
overhead
⎭
⎪
⎪
⎬
⎪
⎪
⎫
=
⎝
⎜
⎜
⎛
Factorydepreciation+Indirectlabor
+Factoryelectricity+Indirectmaterial
⎠
⎟
⎟
⎞
=$31,360+$78,400+$7,840+$35,400
=$153,000
Therefore, total factory overhead is $153,000.
Calculation of processing hours:
\begin{array}{c}\\{\rm{Processing hours = }}\left( \begin{array}{l}\\{\rm{Budgeted volume}}\\\\ \times {\rm{Processing hours per case}}\\\end{array} \right)\\\\ = 4,000 \times 0.20 + 5,000 \times 0.15 + 2,500 \times 0.40\\\\ = 800 + 750 + 1,000\\\\ = 2,550{\rm{ hours}}\\\end{array}
Processinghours=
⎝
⎜
⎜
⎛
Budgetedvolume
×Processinghourspercase
⎠
⎟
⎟
⎞
=4,000×0.20+5,000×0.15+2,500×0.40
=800+750+1,000
=2,550hours
Therefore, there are 2,550 processing hours.
Explanation | Common mistakes | Hint for next step
It is given that factory depreciation is $31,360, indirect labor is $78,400, factory electricity is $7,840 and indirect material is $35,400. Therefore, total factory overhead rate is $153,000. Total processing hours are calculated by multiplying budgeted volume with processing hours. Total factory overhead rate is divided by total processing hour. Therefore, Single plant wide factory overhead rate is $60 per processing hour.