Please solve the following problem using the data below.

Saginaw Engine Parts Inc. (SEP) produces three products?pistons, valves, and cams?for the heavy equipment industry. SEP has a very simple production process and product line and uses a single plantwide factory overhead rate to allocate overhead to the three products. The factory overhead rate is based on direct labor hours. Information about the three products for 2010 is as follows:Budgeted Volume (Units) Direct Labor Hours per Unit Price per Unit Direct Materials per Unit Pistons6,000 0.20 $42.00 $20.50 Valves 24,000 0.1510.503.25 Cams1,000 0.3256.0024.00 The estimated direct labor rate is $24 per direct labor hour. Beginning and ending inventories are negligible and are, thus, assumed to be zero. The budgeted factory overhead for SEP is $128,000.

Total estimated labor hours consumed by the three products: Direct Labor Total Labor Volume Hours er Unit Hours 0.20 0.32 Total estimated direct labor hours Next, determine the plantwide overhead rate: Budgeted Factory Overhead = $128,000 _ $25 00 per dlh Plantwide Allocation Base 5,120 ' Factory Overhead Cost Direct per Unit (Plantwide Direct Labor Cost Labor Hours Overhead Rate x Direct per Unit ($24 x Direct er Unit Labors Hours er Unit Labor Hours er Unit SAGINAW ENGINE PARTS INC. Product Line Budgeted Gross Profit Reports For the Year Ended December 31. 2010 Pistons Valves Revenues E E Direct materials Direct labor Factory overhead Gross profit Gross profit percentage of sales