Multiple Production Department Factory Overhead Rates
Spotted Cow Dairy Company manufactures three products—whole milk, skim milk, and cream—in two production departments, Blending and Packing. The factory overhead for Spotted Cow Dairy is $443,800.
The three products consume both machine hours and direct labor hours in the two production departments as follows:
|Direct Labor Hours||Machine Hours|
The management of Spotted Cow Dairy Company now plans to use the multiple production department factory overhead rate method. The total factory overhead associated with each department is as follows:
If required, round all amounts to the nearest dollar.
1. Determine the multiple production department factory overhead rates, using direct labor hours for the Blending Department and machine hours for the Packing Department.
|Blending Department||$ per direct labor hour|
|Packing Department||$ per machine hour|
2. Determine the product factory overhead costs, using the multiple production department rates in (1).
|Whole milk||Skim milk||Cream|
|Blending Department factory overhead||$||$||$|
|Packing Department factory overhead|
|Total factory overhead||$||$||$|