Rayol 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 implementation department. Information related to the 35,000 desk lamps produced annually follows.
Direct materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $280,000
Direct labor
Fabricating department (7,000 DLH × $20 per DLH) . . . . . . . . . . . . $140,000
Implementation department (16,000 DLH × $29 per DLH) . . . . . . . $464,000
Machine hours
Fabricating department . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,040 MH
Implementation department . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,000 MH
Expected overhead cost and related data for the two production departments follow.

Required
1. Determine the plantwide overhead rate for Rayol using direct labor hours as a base.
2. Determine the total manufacturing cost per unit for the aluminum desk lamp using the plantwide overhead rate.
3. Compute departmental overhead rates based on machine hours in the fabricating department and direct labor hours in the implementation department.
4. Use departmental overhead rates from requirement 3 to determine the total manufacturing cost per unit for the aluminum desklamps.

Transcribed Image Text:

Fabricating Implementation Direct labor hours ..7 75,000 DL Machine hours .80,000 MH 25,000 DLH 6,500 MH Overhead cost .*_.... $300,000 $200,000