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 $523,320, using 436,100 direct labor hours. The factory overhead budget for the Assembly Department is $231,377, using 57,700 direct labor hours. If a desk lamp requires 2 hours of fabrication and 5 hours of assembly, the amount factory overhead that Kaumajet Factory will allocate to each unit of desk lamp using the multiple production department factory overhead rate method with an allocation base of direct labor hours is Oa. $13.08 Ob. $4.01 Oc. $91.55 Od. $22.45
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 $523,320, using 436,100 direct labor hours. The factory overhead budget for the Assembly Department is $231,377, using 57,700 direct labor hours. If a desk lamp requires 2 hours of fabrication and 5 hours of assembly, the amount factory overhead that Kaumajet Factory will allocate to each unit of desk lamp using the multiple production department factory overhead rate method with an allocation base of direct labor hours is Oa. $13.08 Ob. $4.01 Oc. $91.55 Od. $22.45
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Predetermined overhead rate is calculated on the basis of the estimated cost and estimated hours, therefore they usually turnout to be inaccurate. Actual overhead can not be determined until the end of the period, so managers use the Predetermined overhead rate.
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