CH 26-2

Orange County Chrome Company manufactures three chrome-plated productsautomobile bumpers, valve covers, and wheels. These products are manufactured in two production departments (Stamping and Plating). The factory overhead for Orange County Chrome is $219,520.

The three products consume both machine hours and direct labor hours in the two production departments as follows:

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

Required: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).

Amount Descriptions
Activity-base usage
Activity rate
Direct materials
Plating Department
Stamping Department
Total 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).

Direct Labor Hours Machine Hours Stamping Department 560 301 339 1,200 798 557 599 1,954 Automobile bumpers Valve covers Wheels Plating Department 170 185 173 528 1,728 1,168 708 762 2,638 4,592 Automobile bumpers Valve covers Wheels Total