The Dawson Company manufactures small lamps and desk lamps. The following shows the activities per product and the total overhead information: Calculate the total factory overhead to be charged to desk lamps.

Question

The Dawson Company manufactures small lamps and desk lamps. The following shows the activities per product and the total overhead information:   Calculate the total factory overhead to be charged to desk lamps.

Quizplus · Accepted Answer

The total overhead to be charged to desk lamps can be calculated as follows:
Overhead per unit of small lamps = $2.50 + $2.50 + $0.50 + $2.50 = $8.00
Total overhead for small lamps = $5,000,000 × 0.15 = $750,000
Overhead per unit of desk lamps = $8.00 + $5.00 + $3.00 + $2.50 = $18.50
Total overhead for desk lamps = Number of desk lamps × overhead per unit of desk lamps = 150,000 × $18.50 = $2,775,000
Therefore, the total factory overhead to be charged to desk lamps is $2,775,000, which is closest to option B ($235,000).

The Dawson Company Manufactures Small Lamps and Desk Lamps