Camper's Edge Factory Produces Two Products: Canopies and Tents

Essay

Camper's Edge Factory produces two products: canopies and tents. The total factory overhead is budgeted at $750,000 for the year, divided between two departments: Cutting, $350,000, and Sewing, $400,000. Each canopy requires 2 direct labor hours in Cutting and 1 direct labor hour in Sewing. Each tent requires 1 direct labor hour in Cutting and 6 direct labor hours in Sewing. Production for the year is budgeted for 20,000 canopies and 10,000 tents. Determine the:
a. Total number of budgeted direct labor hours for the year in each department.
b. Departmental factory overhead rate for each department.
c. Factory overhead allocated per unit of each product, using the departmental factory overhead rates determined in (b).