The total factory overhead for Big Light Company is budgeted for the year at $807,500. Big Light manufactures two different products: night lights and desk lamps. Night lights are budgeted for 60,000 units. Each night light requires 1/2 hour of direct labor. Desk lamps are budgeted for 80,000 units. Each desk lamp requires 2 hours of direct labor. a. Determine the total number of budgeted direct labor hours for the year. ________________ direct labor hours b. Determine the single plantwide factory overhead rate using direct labor hours as the allocation base. Round your answer to two decimal places. ______________ per direct labor hour c. Determine the factory overhead allocated per unit for each product using the single plantwide factory overhead rate determined in (b). Round your answers to two decimal places. Night Lights _________________________ Desk Lamps _________________
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
The total factory overhead for Big Light Company is budgeted for the year at $807,500. Big Light manufactures two different products: night lights and desk lamps. Night lights are budgeted for 60,000 units. Each night light requires 1/2 hour of direct labor. Desk lamps are budgeted for 80,000 units. Each desk lamp requires 2 hours of direct labor.
a. Determine the total number of budgeted direct labor hours for the year.
________________ direct labor hours
b. Determine the single plantwide factory overhead rate using direct labor hours as the allocation base. Round your answer to two decimal places.
______________ per direct labor hour
c. Determine the factory overhead allocated per unit for each product using the single plantwide factory overhead rate determined in (b). Round your answers to two decimal places.
| Night Lights | _________________________ |
| Desk Lamps | ______________________ |
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