Kaumajet Factory produces two products: table lamps and desk lamps. It has two separate departments: Fabrication and Assembly. The factory overhead budget for the Fabrication Department is $550,000, using 500,000 direct labor hours. The factory overhead budget for the Assembly Department is $400,000, using 80,000 direct labor hours.
-Scoresby Co. uses 6 machine hours and 2 direct labor hours to produce Product X. It uses 8 machine hours and 16 direct labor hours to produce Product Y. Scoresby's Assembly and Finishing departments have factory overhead rates of $240 per machine hour and $160 per direct labor hour, respectively. How much total factory overhead will be allocated to a unit of each of the two products?
A)Product X, $3,200; Product Y, $9,600
B)Product X, $800; Product Y, $800
C)Product X, $1,760; Product Y, $4,480
D)Product X, $1,440; Product Y, $2,560

Question

Quizplus · Accepted Answer

For Product X: Assembly overhead = 6 machine hours * $240/machine hour = $1,440. Finishing overhead = 2 direct labor hours * $160/direct labor hour = $320. Total = $1,440 + $320 = $1,760. For Product Y: Assembly overhead = 8 machine hours * $240/machine hour = $1,920. Finishing overhead = 16 direct labor hours * $160/direct labor hour = $2,560. Total = $1,920 + $2,560 = $4,480.

Kaumajet Factory Produces Two Products: Table Lamps and Desk Lamps