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Laval produces lamps and home lighting fixtures. Its most popular product is a brushed aluminum desk lamp. This lamp is made from components shaped in the fabricating department and assembled in its assembly department. Information related to the 35,000 desk lamps produced annually follow.
Direct materials...............................................................$280,000
Direct labor
Fabricating department (7,000 DLH × $20 per DLH)..................$140,000
Assembly department (16,000 DLH × $29 per DLH)..................$464,000
Machine hours
Fabricating department...................................................15,040 MH
Assembly department....................................................21,000 MH
Expected overhead cost and related data for the two production departments follow.
Laval produces lamps and home lighting fixtures. Its most popular
Required
1. Determine the plant wide overhead rate for Laval using direct labor hours as a base.
2. Determine the total manufacturing cost per unit for the aluminum desk lamp using the plant wide overhead rate.
3. Compute departmental overhead rates based on machine hours in the fabricating department and direct labor hours in the .assembly department.
4. Use departmental overhead rates from requirement 3 to determine the total manufacturing cost per unit for the aluminum desk lamps.
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