Question: laval produces lamps and home lighting fixtures its most popular...
Laval produces lamps and home lighting fixtures. Its most
popular product is a brushed aluminum desk lamp. This lamp is made
from components shaped in the fabricating department and assembled
in the assembly department. Information related to the 26,000 desk
lamps produced annually follows.
|Fabricating department (8,000 DLH × $32 per DLH)||$||256,000|
|Assembly department (16,000 DLH × $20 per DLH)||$||320,000|
Expected overhead cost and related data for the two production departments follow.
|Direct labor hours||190,000||DLH||250,000||DLH|
1. Determine the plantwide overhead rate for Laval using direct labor hours as a base.
2. Determine the total manufacturing cost per unit for the aluminum desk lamp using the plantwide overhead rate.
3. Compute departmental overhead rates based on machine hours in the fabricating department and direct labor hours in the assembly department.
4. Use departmental overhead rates from requirement 3 to determine the total manufacturing cost per unit for the aluminum desk lamps.