Kaumajet Factory Produces Two Products: Table Lamps and Desk Lamps

question 46

Multiple Choice

Kaumajet Factory produces two products: table lamps and desk lamps. It has two separate departments: Fabrication and Assembly. The factory overhead budget for the Fabrication Department is $550,000, using 500,000 direct labor hours. The factory overhead budget for the Assembly Department is $400,000, using 80,000 direct labor hours.
-Using multiple department factory overhead rates instead of a single plantwide factory overhead rate

• A)results in more accurate product costs
• B)results in distorted product costs
• C)is simpler and less expensive to compute than a plantwide rate
• D)applies overhead costs to all departments equally

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