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Laval produces lamps and home lighting fixtures. Its most popular product is a brushed aluminum desk...

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Question

Accounting

Laval produces lamps and home lighting fixtures. Its mostpopular product is a brushed aluminum desk lamp. This lamp is madefrom components shaped in the fabricating department and assembledin the assembly department. Information related to the 35,000 desklamps produced annually follows.

Direct materials$260,000
Direct labor
Fabricating department (6,500 DLH × $34 per DLH)$221,000
Assembly department (16,200 DLH × $22 per DLH)$356,400
Machine hours
Fabricating department14,100MH
Assembly department20,500MH

  
Expected overhead cost and related data for the two productiondepartments follow.

FabricatingAssembly
Direct labor hours120,000DLH345,000DLH
Machine hours170,000MH130,000MH
Overhead cost$420,000$420,000

  
Required
1. Determine the plantwide overhead rate for Lavalusing direct labor hours as a base.
2. Determine the total manufacturing cost per unitfor the aluminum desk lamp using the plantwide overhead rate.
3. Compute departmental overhead rates based onmachine hours in the fabricating department and direct labor hoursin the assembly department.
4. Use departmental overhead rates fromrequirement 3 to determine the total manufacturing cost per unitfor the aluminum desk lamps.

Answer & Explanation Solved by verified expert
3.7 Ratings (340 Votes)
Answer to Requirement1Estimated Overhead Costs 420000 420000Estimated Overhead Costs 840000Estimated Direct Labor    See Answer
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