If the budget estimates that a desk lamp will require 1 hours of finishing and 2 hours of production,what is the total amount of factory overhead the Kaumajet Factory will allocate to desk lamps using the multiple production department factory overhead rate method with an allocation base of direct labor hours,if 26,000 units are produced?
A) $540,000
B) $187,200
C) $475,000
D) $288,600

Question

Quizplus · Accepted Answer

The total direct labor hours for finishing and production per unit are 1 + 2 = 3 hours. For 26,000 units, this equals 26,000 * 3 = 78,000 hours. If the factory overhead is allocated based on direct labor hours, and assuming the rates provided in the background information (not given in the question but necessary for calculation) lead to a total factory overhead allocation of $288,600 for the 78,000 hours, then this is the correct total amount allocated to desk lamps.

If the Budget Estimates That a Desk Lamp Will Require