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.
-The Assembly Department's factory overhead rate is
A)$10.50 per direct labor hour
B)$19.50 per direct labor hour
C)$3.75 per machine hour
D)$4.38 per machine hour

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.
-The Assembly Department's factory overhead rate is
A)$10.50 per direct labor hour 
B)$19.50 per direct labor hour 
C)$3.75 per machine hour 
D)$4.38 per machine hour

Quizplus · Accepted Answer

The correct factory overhead rate for the Assembly Department is $10.50 per direct labor hour.

Aleutian Company Produces Two Products: Rings and Dings