Question
The Kaumajet Factory produces two products - table lamps and desk lamps. It has two separate departments - Finishing and Production. The overhead budget for
The Kaumajet Factory produces two products - table lamps and desk lamps. It has two separate departments - Finishing and Production. The overhead budget for the Finishing Department is $227,700, using 227,700 direct labor hours. The overhead budget for the Production Department is $289,350 using 64,300 direct labor hours.
If the budget estimates that a desk lamp will require 5 hours of finishing and 8 hours of production, how much factory overhead will the Kaumajet Factory allocate to each unit of desk lamps using the multiple production department factory overhead rate method with an allocation base of direct labor hours?
a.$104.53
b.$8.04
c.$4.50
d.$41.00
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