Blackwelder Factory produces two similar products - small lamps and desk lamps. The total plant overhead budget is $640,000 with 400,000 estimated direct labor hours. It is further estimated that small lamp production will require 275,000 direct labor hours and desk lamp production will need 125,000 direct labor hours. Using the single plantwide factory overhead rate with an allocation base of direct labor hours, how much factory overhead will Blackwelder Factory allocate to desk lamp production if actual direct hours for the period is 118,000?

a.$118,000

b.$125,000

c.$188,800

d.$200,000

1. Calculator

   Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be traced to four separate activity pools. The budgeted activity cost and activity base data by product are provided below.

   	Activity Cost		Activity Base
   Procurement	$370,000		Number of purchase orders
   Scheduling	250,000		Number of production orders
   Materials handling	500,000		Number of moves
   Product development	730,000		Number of engineering changes
   Production	1,500,000		Machine hours

   	Number of Purchase Orders		Number of Production Orders		Number of Moves		Number of Engineering Changes		Machine Hours		Number of Units
   Disk drives	4,000		300		1,400		10		2,000		2,000
   Tape drives	4,000		150		800		10		8,000		4,000
   Wire drives	12,000		800		4,000		25		10,000		2,500

   Determine the activity rate for materials handling per move.

   a.$80.65

   b.$50.00

   c.$20.83

   d.$58.82