Pattern Department overhead $216,000 Gut and Sew Department overhead 960,000 Total $1,176,000 The direct labor estimated for each production department was as follows: Pattern Department overhead 36,000 direct labor hours Cut and Sew Department 960,000 Total $96,000 direct labor hours Production Departments Small Glove Medium Glove Large Glove Pattern Department 0.20 0.24 0.30 Cut and Sew Department 0.50 0.60 0.72 Direct labor hours per 0.70 0.84 1.02 unit

Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter6: Activity-based, Variable, And Absorption Costing
Section: Chapter Questions
Problem 1EA: Steeler Towel Company estimates its overhead to be $250,000. It expects to have 100,000 direct labor...
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multiple production department factory i=overhead rate method

perfomance Gloves,Inc. produces three size of sports gloves:small,medium and large.A glove pattern is first stenciled onto leather in the Pattern Department,where the gloves is cut and sewed together.

Perfomance Gloves uses the multiple production department factiey overhead rate methid of allocating factory overhead costs.Its factory overhead costs were budgeted as follows:

The direct labor estimated for each production department was as follows:

Direct labor hours are used to allocate the production department overhead to the products.The direct labor hours per unit for each product for eacg production department were obtained from the engineering records as follows:

a) Determine the two production department factory overhead rates.

b) Use the two production department factory rates to detrmine the factory overhead per unit for each product.

 

Pattern Department overhead
$216,000
Gut and Sew Department overhead 960,000
Total
$1,176,000
The direct labor estimated for each production department was as
follows:
Pattern Department overhead 36,000 direct labor hours
Cut and Sew Department
960,000
Total
$96,000 direct labor hours
Transcribed Image Text:Pattern Department overhead $216,000 Gut and Sew Department overhead 960,000 Total $1,176,000 The direct labor estimated for each production department was as follows: Pattern Department overhead 36,000 direct labor hours Cut and Sew Department 960,000 Total $96,000 direct labor hours
Production Departments
Small Glove Medium Glove Large Glove
Pattern Department
0.20
0.24
0.30
Cut and Sew Department
0.50
0.60
0.72
Direct labor hours per
0.70
0.84
1.02
unit
Transcribed Image Text:Production Departments Small Glove Medium Glove Large Glove Pattern Department 0.20 0.24 0.30 Cut and Sew Department 0.50 0.60 0.72 Direct labor hours per 0.70 0.84 1.02 unit
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