Question
Challenger Factory produces two similar products: regular widgets and deluxe widgets. The total factory overhead budget is $607,000 with 314,800 estimated direct labor hours. Deluxe
Challenger Factory produces two similar products: regular widgets and deluxe widgets. The total factory overhead budget is $607,000 with 314,800 estimated direct labor hours. Deluxe widget production requires 4 direct labor hours for each unit, and regular widget production requires 2 direct labor hours for each unit.
Using a single plantwide factory overhead rate (rounded to the nearest cent) with an allocation base of direct labor hours, the factory overhead that Challenger Factory will allocate to regular widget production if budgeted production of regular widgets for the period is 75,000 units and actual production of regular widgets for the period is 122,500 units would be
a. $472,850
b. $303,500
c. $944,822
d. $236,206
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