44. The Kaumajet Factory produces two products-table lamps and desk lamps. It ha

Question

44. The Kaumajet Factory produces two products-table lamps and desk lamps. It has two separate departments - Finishing and Production. The overhead budget for the Finishing Department is $699,744, using 355,200 direct labor hours. The overhead budget for the Production Department is $373,056 using 53,600 direct labor hours.

If the budget estimates that a table lamp will require 5 hours of finishing and 8 hours of production, how much factory overhead will the Kaumajet Factory allocate to each unit of table lamp using the multiple production department factory overhead rate method with an allocation base of direct labor hours?

$6.96

$20.01

$260.17

$65.53

Explanation / Answer

Finishing Production A Overheads 699744 373056 B Direct Labor Hours 355200 53600 C=A/B Overhead Per DLH 1.97 6.96 D Table Lamp Requirement 5.00 8.00 Total C*D Allocated OH 9.85 55.68 65.53 Answer is $65.53

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