Reference no: EM132690660

Problem - Multiple production department factory overhead rate method

Gourmet Appliance Company manufactures small kitchen appliances. The product line consists of blenders and toaster ovens. Gourmet Appliance presently uses the multiple production department factory overhead rate method. The factory overhead is as follows:

Assembly Department $108,000

Test and Pack Department 70,000

Total $178,000

The direct labor information for the production of 5,000 units of each product is as follows:

	Assembly Department	Test and Pack Department
Blender	500 dlh	1,500 dlh
Toaster oven	1,500	500
Total	2,000 dlh	2,000 dlh

Gourmet Appliance used direct labor hours to allocate production department factory overhead to products.

Required -

a. Determine the two production department factory overhead rates.

b. Determine the total factory overhead and the factory overhead per unit allocated to each product.