Multiple Production Department Factory Overhead Rates

Spotted Cow Dairy Company manufactures three productswhole milk, skim milk, and creamin two production departments, Blending and Packing. The factory overhead for Spotted Cow Dairy is $428,900.

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

Multiple Production Department Factory Overhead Rates Spotted Cow Dairy Company manufactures three products-whole milk, skim milk, and cream-in two production departments, Blending and Packing. The factory overhead for Spotted Cow Dairy is $428,900. The three products consume both machine hours and direct labor hours in the two production departments as follows Direct Labor Hours Machine Hours Blending Department Whole milk Skim milk Cream 610 390 300 1,300 830 670 530 2,030 Packing Department Whole milk Skim milk Cream 180 190 175 545 1,845 1,190 730 780 2,700 4,730 Total The management of Spotted Cow Dairy Company now plans to use the multiple production department factory overhead rate method. The total factory overhead associated with each department is as follows Blending Department Packing Department $221,000 207,900 $428,900 Total