Challenger Factory Produces Two Similar Products - Regular Widgets and Deluxe

question 93

Multiple Choice

Challenger Factory produces two similar products - regular widgets and deluxe widgets. The total plant overhead budget is $675,000 with 300,000 estimated direct labor hours. It is further estimated that deluxe widget production will need 3 direct labor hours for each unit and regular widget production will require 2 direct labor hours for each unit.
Using the single plantwide factory overhead rate with an allocation base of direct labor hours, how much factory overhead will Challenger Factory allocate to deluxe widget production if budgeted production for the period is 50,000 units and actual production for the period is 58,000 units?

• A) $391,500
• B) $225,000
• C) $261,000
• D) $337,500

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Definitions:

Further Up

Used to refer to stages or positions that are higher in a hierarchy, supply chain, or process, often implicating more responsibility or control.

Push Processes

Supply chain processes that operate on forecast demand, pushing products through the supply chain to the end user.

Customer Demand

The quantity of products or services that consumers are willing and able to purchase at various prices during a specified period.

Available Capacity

The maximum output or the total amount of work that a facility, employee, or machine can produce or accommodate in a specific period.