Instructions Matts Music Inc makes three musical instruments

Instructions Matt\'s Music Inc. makes three musical instruments: trumpets, tubas, and trombones. The budgeted factory overhead cost is $199,998. Factory 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 Trumpets Tubas Trombones Budgeted Production Volume (in units) 2,260 Direct Labor Hours per Unit 0.90 1.70 1.40 660 1,230 Required: A. Determine the single plantwide factory overhead rate. (Note: Round amount to the nearest whole dollar. Use this amount in subsequent computations if applicable.) B. Use the factory overhead rate in (A) to determine the amount of total and per-unit factory overhead allocated to each of the three products Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.

Solution

A) Total direct labor hours = DLH for Trumpets+DLH for Tubas+DLH for Trombones

= (2,260 units*0.90 hr)+(660 units*1.70 hrs)+(1,230 units*1.40 hrs)

= 2,034 hrs+1,122 hrs+1,722 hrs = 4,878 hrs

Factory overhead rate = Budgeted Factory Overhead Cost/Total direct labor hours

= $199,998/4,878 hours = $41 per hour

B) Calculation of total factory overhead and per unit factory overhead (Amts in $)

Particulars	Trumpets	Tubas	Trombones
1) Budgeted Production units	2,260	660	1,230
2) Direct Labor Hours	2,034	1,122	1,722
3) Factory Overhead rate per DLH	41	41	41
4) Total Factory Overhead (2*3)	83,394	46,002	70,602
5) Factory Overhead per unit (4/1)	36.90	69.70	57.40