Question

Kaumajet Factory produces two products: table lamps and desk lamps. It has two separate departments: Fabrication and Assembly. The factory overhead budget for the Fabrication Department is $233,682, using 229,100 direct labor hours. The factory overhead budget for the Assembly Department is $335,104, using 74,800 direct labor hours.

If a desk lamp requires 2 hour of fabrication and 5 hours of assembly, the total amount of factory overhead that Kaumajet Factory will allocate to desk lamps using the multiple production department factory overhead rate method with an allocation base of direct labor hours if 10,700 units are produced is

a.$47,936

b.$81,362

c.$140,185

d.$261,508

Answer 1

--Correct Answer = Option 'D' $ 261,508 [ 21828 + 239680]

Working		fabrication	assembly
A	Overhead cost	$233,682	$335,104
B	Budgeted DLHs	229100	74800
C = A/B	Overhead rate per DLHs	$                                                     1.02	$                                                                  4.48
D	NO. of DLHs per units	2	5
E = C x D	Total Overhead allocated per unit	$                                                     2.04	$                                                               22.40
F	Total units produced	10700	10700
G = E x F	Total Overhead Allocated = Answer	$21,828	$239,680