Bugaboo Co. manufactures three types of cookies: Fluffs, Crinkles, and Snaps. The production process is relatively simple, and factory overhead costs are allocated to products using a single plantwide factory rate based on direct labor hours. Information for the month of May, Bugaboo's first month of operations, follows:

Bugaboo has budgeted direct labor costs for May at $8.50 per hour. Budgeted direct materials costs for May are: Fluffs, $0.75/unit; Crinkles $0.40/unit; and Snaps $0.30/unit.
Bugaboo's budgeted overhead costs for May are:
Indirect Labor...................................$280,000
Utilities............................................$65,000
Supplies...........................................$45,000
Depreciation....................................$30,000
Total $420,000
Assume that Bugaboo sells all the boxes it produces in May. Round your answers to two decimal places, if necessary.
a. Compute Bugaboo's plantwide factory overhead rate for May.$_______per direct labor hour
b. Compute May's product cost for each type of cookie.

Transcribed Image Text:

Direct Labor Hours per unit Budgeted Unit Volume 80,000 boxes Fluffs 0.10 60,000 boxes Crinkles 0.20 Snaps 20,000 boxes 0.50 Cost per box Crinkles Snaps Fluffs Total manufacturing cost