Reference no: EM133039579

Question - Handy Leather, Inc., produces three sizes of sports gloves: small, medium, and large. A glove pattern is first stenciled onto leather in the Pattern Department. The stenciled patterns are then sent to the Cut and Sew Department, where the glove is cut and sewed together. Handy Leather uses the multiple production department factory overhead rate method of allocating factory overhead costs. Its factory overhead costs were budgeted as follows:

Pattern department Overhead $140,700

Cut and sew Department overhead $231,400

Total $372100

Direct labor labor estimated for each department was as follows:

Pattern Dept. - 2100 direct labor hours

Cut and Sew Department 2600

Total 4700 direct labor hours

Direct labor hours are used to allocate the production department overhead to the products. The direct labor hours per unit for each product for each production department were obtained from the engineering records as follows:

Production Departments Small Glove Medium Glove Large Glove

Pattern dept. 0.04 0.05 0.06

Cut and sew dept. 0.07 0.09 0.11

Direct labor hours per unit 0.11 0.14 0.17

If required, round all per unit answers to the nearest cent.

Required -

a. Determine the two production department factory overhead rates.

b. Use the two production department factory overhead rates to determine the factory overhead per unit for each product.