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Problem - Bach Instruments Inc. makes three musical instruments: flutes, clarinets, and oboes. The budgeted factory overhead cost is $2,948,125. Overhead is allocated to the three products on the basis of direct labor hours. The products have the following budgeted production volume and direct labor hours per unit:
Budgeted Production Volume
Direct Labor Hours per Unit
Flutes
2,000 units
2.0
Clarinets
1,500
3.0
Oboes
1,750
1.5
Required -
a. Determine the single plantwide overhead rate.
b. Use the overhead rate in (a) to determine the amount of total and per-unit overhead allocated to each of the three products, rounded to the nearest dollar.
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