The camper's edge factory produces two products — canopies and tents. it has two separate departments — cutting and sewing. the factory overhead budget is $350,000 for the cutting department and $400,000 for the sewing department. each canopy requires 2 hours of cutting and 1 hour of sewing. each tent requires 1 hour of cutting and 6 hours of sewing. the budget estimates that 20,000 canopies and 10,000 tents will be manufactured during the year. a. determine the total number of budgeted direct labor hours for the year in each department. direct labor hours labor hours b. determine the departmental factory overhead rates for both departments. round your answers to two decimal places, if necessary. c. determine the factory overhead allocated per unit of each product using the department factory overhead allocation rates using direct labor hours as the base. round your answers to two decimal places, if necessary. tot. foh per canopy tot. foh per tent

(1) 50,000; 80,000

(2) $7 per hour; $5 per hour

(3) $19; $37

Explanation:

(1) Cutting

20,000 canopy × 2 hours of cutting

= 40,000 hours

10,000 tents × 1 hours of cutting

= 10,000 hours

Total hours = 40,000 + 10,000

                   = 50,000 hours

Sewing :

20,000 canopy × 1 hours of sewing

= 20000 hours

10,000 tents × 6 hours of sewing

= 60,000 hours

Total = 60,000 + 20,000

        = 80,000 hours

(2.) Factory overhead :

Cutting = total cost ÷ total direct labor hours

             = $350,000 ÷ 50,000 hours

             = $7 per hour

Sewing = total cost ÷ total labor hours

             = $400,000 ÷ 80,000 hours

            = $5 per hours

(3.) Factory overhead rate per unit :

Canopy:

= (cutting hours used per canopy × Factory overhead rate per hour for cutting) + ( sewing hours per canopy × hours rate per sewing )

= (2 hours × $7) + (1 hours ×$5 )

= $19 per canopy

Tent:

= (per unit hours of cutting × rate per cutting hours) + (Hours used for sewing × rate per hour of sewing)

= (1 hours × $7) + (6 hours × $5 )

= $37 per tent

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