Question
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
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 $299,700. The three products consume both machine hours and direct labor hours in the two production departments as follows: 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: 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 $ 110 per machine hour Packing Department $ 75 per direct labor hour 2. Determine the product factory overhead costs, using the multiple production department rates in (1). Whole Milk Skim Milk Cream Blending Department factory overhead $ 71500 $ 78100 $ 28600 Packing Department factory overhead 35250 22500 9750 Total factory overhead $ 106750 $ 100600 $ 38350
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