Laval produces lamps and home lighting fixtures. Its mostpopular product is a brushed aluminum desk lamp. This lamp is madefrom components shaped in the fabricating department and assembledin the assembly department. Information related to the 35,000 desklamps produced annually follows.
| | | |
| Direct materials | $ | 260,000 | |
| Direct labor | | | |
| Fabricating department (6,500 DLH × $34 per DLH) | $ | 221,000 | |
| Assembly department (16,200 DLH × $22 per DLH) | $ | 356,400 | |
| Machine hours | | | |
| Fabricating department | | 14,100 | MH |
| Assembly department | | 20,500 | MH |
|
Expected overhead cost and related data for the two productiondepartments follow.
| Fabricating | Assembly |
| Direct labor hours | | 120,000 | DLH | | 345,000 | DLH |
| Machine hours | | 170,000 | MH | | 130,000 | MH |
| Overhead cost | $ | 420,000 | | $ | 420,000 | |
|
Required
1. Determine the plantwide overhead rate for Lavalusing direct labor hours as a base.
2. Determine the total manufacturing cost per unitfor the aluminum desk lamp using the plantwide overhead rate.
3. Compute departmental overhead rates based onmachine hours in the fabricating department and direct labor hoursin the assembly department.
4. Use departmental overhead rates fromrequirement 3 to determine the total manufacturing cost per unitfor the aluminum desk lamps.
