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Problem - Multiple production department factory overhead rates - The total factory overhead for Diva-nation is budgeted for the year at $180,000, divided into two departments: Cutting, $60,000, and Sewing, $120,000. Diva-nation manufactures two types of men's pants: jeans and khakis. The jeans require 0.04 direct labor hour in Cutting and 0.06 direct labor hour in Sewing. The khakis require 0.06 direct labor hour in Cutting and 0.04 direct labor hour in Sewing. Each product is budgeted for 20,000 units of production for the year.
Required -
Determine the total number of budgeted direct labor hours for the year in each department,
Determine the departmental factory overhead rates for both departments, and
Determine the factory overhead allocated per unit for each product using the department factory overhead allocation rates.
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