Handy leather, inc., produces three sizes of sports gloves: small, medium, and large. a glove pattern is first stenciled onto leather in the pattern department. the stenciled patterns are then sent to the cut and sew department, where the glove is cut and sewed together. handy leather uses the multiple production department factory overhead rate method of allocating factory overhead costs. its factory overhead costs were budgeted as follows: pattern department overhead $91,800 cut and sew department overhead 156,400 total $248,200 the direct labor estimated for each production department was as follows: pattern department 1,800 direct labor hours cut and sew department 2,300 total 4,100 direct labor hours direct labor hours are used to allocate the production department overhead to the products. the direct labor hours per unit for each product for each production department were obtained from the engineering records as follows: production departments small glove medium glove large glove pattern department 0.05 0.06 0.07 cut and sew department 0.08 0.10 0.12 direct labor hours per unit 0.13 0.16 0.19 if required, round all per unit answers to the nearest cent. a. determine the two production department factory overhead rates. pattern department $ per dlh cut and sew department $ per dlh b. use the two production department factory overhead rates to determine the factory overhead per unit for each product. small glove $ per unit medium glove $ per unit large glove $ per unit

Instructions are listed below

Explanation:

Production Departments Small Glove Medium Glove Large Glove Pattern Department 0.05 0.06 0.07 Cut and Sew Department 0.08 0.10 0.12 Direct labor hours per unit 0.13 0.16 0.19Giving the following information:

Its factory overhead costs were budgeted as follows:

Pattern Department overhead $91,800

Cut and Sew Department overhead 156,400

Total $248,200

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

Pattern Department 1,800

Cut and Sew Department 2,300

Total 4,100 direct labor hours.

Direct labor hours are used to allocate the production department overhead to the products

1) Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Pattern:

Estimated manufacturing overhead rate= 91800/1800= $39.91 per direct labor hour

Cut and Sew:

Estimated manufacturing overhead rate= 156400/2300= $68 per direct labor hour

2) Production Departments: Direct labor hour

Pattern Department:

Small Glove: 0.05

Medium Glove: 0.06

Large Glove: 0.07

Cut and Sew Department  

Small Glove: 0.08

Medium Glove: 0.10

Large Glove: 0.12

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Small Glove:

Allocated MOH= (39.91*0.05)+(68*0.08)= $7.44

Medium Glove:

Allocated MOH= (39.91*0.06)+(68*0.10)= $9.20

Large Glove:

Allocated MOH= (39.91*0.07)+(68*0.12)= $11

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