l Online Main do?invok gress falise Multiple Production Department Factory Overh

Question

l Online Main do?invok gress falise Multiple Production Department Factory Overhead Rates Spotted Cow Dairy Company manufactures three products-whole mitk, skim milk, and cream-in o Spotted Cow Dairy is $448,000 production departments, Blending and Packing The factory overhead for The three prodlcts consume both machine hours and direct labor hours in the two production departments as follows Direct La Hours Machine Whole mlk 1,150 540 Cream 730 1,800 Packing Department 250 1,760 ,160 755 The management of Spotted Cow Dairy Company now plans to use the mutiple productien department factory overnead rate method. The toral factory overhed t is as folows siending Department Packing Department $252,000 196,000 $448.000 PreviousNext

Explanation / Answer

Answer 1

= Total Factory overgead for blending department / Total direct labour hours for  blending department

= $252,000 / 1,800 direct labour hours = $140  per direct labor hour

= Total Factory overgead for packing department / Total machine hours for packing department

= $196,000 / 4,000 machine hours = $49 per machine hour

Answer 2 Computation of product factory overhead costs

Particulars Amount ($) Blending Department $140  per direct labor hour Packing Department $49 per machine hour

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