Aleutian Company produces two products: Rings and Dings. They are manufactured in two departments: Fabrication and Assembly. Data for the products and departments are listed below. All of the machine hours take place in the Fabrication Department, which has estimated total factory overhead of $90,000. All of the labor hours take place in the Assembly Department, which has estimated total factory overhead of $105,000.Aleutian Company uses the multiple production department factory overhead rate method. The Fabrication Department uses machine hours as an allocation base, and the Assembly Department uses direct labor hours.
-All of the following can be used as an allocation base for calculating factory overhead rates except
A)direct labor dollars
B)direct labor hours
C)machine hours
D)total units produced

Question

Aleutian Company produces two products: Rings and Dings. They are manufactured in two departments: Fabrication and Assembly. Data for the products and departments are listed below.  All of the machine hours take place in the Fabrication Department, which has estimated total factory overhead of $90,000. All of the labor hours take place in the Assembly Department, which has estimated total factory overhead of $105,000.Aleutian Company uses the multiple production department factory overhead rate method. The Fabrication Department uses machine hours as an allocation base, and the Assembly Department uses direct labor hours.
-All of the following can be used as an allocation base for calculating factory overhead rates except
A)direct labor dollars 
B)direct labor hours 
C)machine hours 
D)total units produced

Quizplus · Accepted Answer

Total units produced is not typically used as an allocation base for calculating factory overhead rates because it does not accurately reflect the consumption of overhead resources in the production process. Direct labor dollars, direct labor hours, and machine hours are more commonly used because they provide a more accurate measure of the resources consumed.

Aleutian Company Produces Two Products: Rings and Dings