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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
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 $299,700. The three products consume both machine hours and direct labor hours in the two production departments as follows: Blending Department Direct Labor Hours Machine Hours Whole milk 260 650 Skim milk 245 710 Cream 215 260 Sub total 720 1,620 Packing Department Whole milk 470 500 Skim milk 300 415 Cream Sub total 130 165 900 1,080 Total 1,620 2,700 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: Total 1,620 2,700 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 Total $178,200 121,500 $299,700 Required: 1. Determine the multiple production department factory overhead rates, using machine hours for the Blending Department and direct labor hours for the Packing Department. Blending Department s 110 per machine hour Packing Department s 135 per direct labor hour 2. Determine the product factory overhead costs, using the multiple production department rates in (1). Blending Department factory overhead Whole Milk Skim Milk Cream Packing Department factory overhead Total factory overhead
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