Question
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
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 $215,226.
The three products consume both machine hours and direct labor hours in the two production departments as follows:
Direct Labor Hours | Machine Hours | |
Stamping Department | ||
Automobile bumpers | 563 | 805 |
Valve covers | 303 | 556 |
Wheels | 340 | 596 |
1,206 | 1,957 | |
Plating Department | ||
Automobile bumpers | 174 | 1,168 |
Valve covers | 177 | 713 |
Wheels | 172 | 756 |
523 | 2,637 | |
Total | 1,729 | 4,594 |
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:
1 | Stamping Department | $109,746.00 |
2 | Plating Department | 105,480.00 |
3 | Total | $215,226.00 |
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