Single plantwide factory overhead rate Bach Instruments Inc. makes three musical instruments: flutes, clarinets, and oboes. The budgeted factory overhead cost is $127,800. Overhead is allocated to the three products on the basis of direct labor hours. The products have the following budgeted production volume and direct labor hours per unit:. Budgeted Production VolumeDirect Labor Hours Per Unit
Flutes2,100units0.8
Clarinets800 1.4
Oboes1,300 1.0
If required, round all per unit answers to the nearest cent.
a. Determine the single plantwide overhead rate.
$ per direct labor hour
b. Use the overhead rate in (a) to determine the amount of total and per-unit overhead allocated to each of the three products.
Total
Factory Overhead CostPer Unit
Factory Overhead Cost
Flutes$$
Clarinets
Oboes
Total$

A.$31.2 per hour

B. Factory Overhead Cost Per Unit

Flutes $24.96

Clarinets $43.68

Oboes $32.74

Factory Overhead Cost

Flutes 52,416

Clarinets 34,944

Oboes 40,560

Explanation:

A. Calculation to Determine the single plantwide overhead rate.

First step is to calculate theTotal Hours

Total Direct Labor Hours

Flutes2100 units *0.8 hour per unit= 1,680

Clarinets800 units *1.4 hours per unit= 1,120

Oboes1300 units *1.0 hour per unit=1,300

Total Hours4,100

Now let calculate the Plantwide overhead rate using this formula

Plantwide overhead rate = Total Overhead Cost / Total labor hours

Let plug in the formula

Plantwide overhead rate=$127,800/4,100

Plantwide overhead rate=$31.2 per hour

Therefore Plantwide overhead rate will be $31.2 per hour

B. Calculation to determine the amount of total and per-unit overhead allocated to each of the three products.

ProductTotal Labor HoursTotal Overhead Overhead Per Unit

Flutes1,680 52,416 (1,680*31.2) $24.96 (52416/2100)

Clarinets1,120 34,944(1,120*31.2) $43.68 (34,944/800)

Oboes1,300 40,560

(1,300*31.2) $32.74 (40,560/1,300)

Total4,100 127,920$101.38

Therefore Factory Overhead Cost Per Unit and Factory Overhead Cost Will be:

Factory Overhead Cost Per Unit

Flutes $24.96

Clarinets $43.68

Oboes $32.74

Factory Overhead Cost

Flutes 52,416

Clarinets 34,944

Oboes 40,560

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