Chapter 4, Problem 2PA

Multiple production department factory overhead rates

The management of Orange County Chrome Company, described in Problem 1A, now plans to use the multiple production department factory overhead rate method. The total factory overhead associated with each department is as follows:

Stamping Department	$115,200
Plating Department	105,600
Total	$220,800

Instructions

1. Determine the multiple production department factory overhead rates, using direct labor hours for the Stamping Department and machine hours for the Plating Department.

2. Determine the product factory- overhead costs, using the multiple production department rates in (1).