Sawtooth Leather Company manufactures leather handbags and moccasins. Total factory overhead is budgeted for $360,000. For simplicity, the company has decided to use a single plantwide factory overhead rate to allocate factory overhead based on direct labor hours. Handbags are budgeted for 60,000 units. Each handbag requires 2 hours of direct labor. Moccasins are budgeted for 40,000 pairs. Each pair of moccasins requires 3 hours of direct labor. Determine the amount of factory overhead to be allocated per unit(pair) for each product.

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The Answer of Sawtooth Leather Company manufactures leather handbags and moccasins. Total factory overhead is budgeted for $360,000. For simplicity, the company has decided to use a single plantwide factory overhead rate to allocate factory overhead based on direct labor hours. Handbags are budgeted for 60,000 units. Each handbag requires 2 hours of direct labor. Moccasins are budgeted for 40,000 pairs. Each pair of moccasins requires 3 hours of direct labor. Determine the amount of factory overhead to be allocated per unit(pair) for each product.

Sawtooth Leather Company Manufactures Leather Handbags and Moccasins