Kao Engines produces pistons, valves, and cams using a single plantwide factory overhead rate based on direct labor hours to allocate overhead costs. The document provides budgeted factory overhead, estimated direct labor rate per hour, and units produced of each product. It asks to calculate the plantwide overhead rate, overhead and direct labor cost per unit for each product, and construct a budgeted gross profit report by product line including gross profit percentage.

1. Product costs and product profitability reports, using a single plantwide factory overhead rate
Kao Engines inc. produces three products-pistons, valves, and cams-for the heavy equipment
industry. Kao Engines' production process uses a single plantwide factory overhead rate based
upon direct labor hours to allocate overhead to the three products. The three products for 20 Y 2
are as follows: The estimated direct labor rate is $25 per direct labor hour. Beginning and ending
inventories are negligible and are, thus, assumed to be zero. The budgeted factory overhead for
Kao Engines is $377 , 600 . If required, round all per unit answers to the nearest cent. a.
Determine the plantwide factory overhead rate. per dilh b. Determine the factory puerhead and
direct labor cost per unit for each product. c. Use the information provided to construct a
budgeted gross profit report by product line for the year ended December 31 , 20 Y 2 . Include
the gross profit as a percent of sales in the last line of your report, rounded to one decimal place.