Condelezza Co $\begin{array}{ll}\text { Assembly } & \$ 310,000 \\\text { Finishing } & \$ 240,000 \\\text { Total } & \$ 550,000\end{array}$

question 66

Essay

Condelezza Co. manufactures two products, A and B, in two production departments, Assembly and Finishing. Condelezza Co. expects to produce 10,000 units of Product A and 20,000 units of Product B in the coming year. Budgeted factory overhead costs for the coming year are: $\begin{array}{ll}\text { Assembly } & \$ 310,000 \\\text { Finishing } & \$ 240,000 \\\text { Total } & \$ 550,000\end{array}$ The machine hours expected to be used in the coming year are as follows: $\begin{array}{crr}&\text { Assembly } & \text { Finishing } \\&\text { Dept. } & \text { Dept. }\\\text { Froduct A } & 15,100 & 9,000 \\\text { Froduct B } & \underline{4,900} & \underline{11,000} \\\text { Total } & \underline{20,000} & \underline{20,000}\end{array}$ a) Compute the plantwide factory overhead rate.
Compute the production department factory overhead rates.
b) Compute the factory overhead per unit for each product using 1) the single plantwide rate and 2) production department factory overhead rates.
c) Which method is better plantwide or department)? Why?

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Definitions:

Sell

The action of offloading an investment from one's portfolio, typically with the goal of realizing gains or limiting losses.

Year-End

The end of a fiscal or calendar year, often used to reference the closing of financial accounts.

Taxes

Mandatory financial charges or levies imposed by a government on individuals, entities, or transactions to fund government spending and various public expenditures.

Futures Position

An investment strategy involving contracts for the purchase or sale of assets at a future date at a price specified today.