Calculation of Factory Overhead Rate (Single Plantwide)

Under the _____________ factory overhead rate method, the total budgeted factory overhead is applied to all products by using one rate.

single plantwide

single plantwide overhead rate formula

total budgeted (est) overhead cost / divided by / total budgeted (est) plantwide allocation base

The total budgeted direct labor hours are computed as follows:

units of planned production for the period **times** direct labor hrs per unit

Plantwide overhead rate

a single predetermined overhead rate for an entire factory (all depts use same rate) when overhead is allocated to every product using the same manufacturing overhead rate most suitable for firms that are small and have a simple cost structure

a. Total Factory Overhead ÷ Total Direct Machine Hours = Overhead Rate

Product Costs = Rate x Machine Hours for each Product

Factory Overhead Cost per Unit = (to be allocated to each product b/c each product is assumed to use same amt of allocation base like direct labor hours)

Single Plantwide Factory Overhead Rate × (times) Direct Labor Hours per Unit

The budgeted _______________ is a measure of operating activity in the factory.

allocation base Common allocation bases would include direct labor hours, direct labor dollars, and machine hours.

The ___________ &_____________ are direct costs that can be traced to the product.

direct materials direct labor

Product costs consist of

direct materials, direct labor, and factory overhead

Predetermined Overhead Rate (single)

estimated total manufacturing overhead cost/estimated total amount of the allocation base EX: answer would look like $80 of fact overhead per direct labor hour

However, ______________includes indirect costs that must be allocated to the product

factory overhead