The Kaumajet Factory Produces Two Products - Table Lamps and Desk

question 56

Multiple Choice

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 $550,000, using 500,000 direct labor hours. The overhead budget for the Production Department is $400,000 using 80,000 direct labor hours. If the budget estimates that a desk lamp will require 1 hours of finishing and 2 hours of production, what is the total amount of factory overhead the Kaumajet Factory will allocate to desk lamps using the multiple production department factory overhead rate method with an allocation base of direct labor hours, if 26,000 units are produced?

• A) $540,000
• B) $187,200
• C) $475,000
• D) $288,600

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Definitions:

Current Liabilities

Obligations or debts that a company must pay within a year.

Inventory

The goods and materials a business holds for the ultimate goal of resale or repair.

Benchmarking

The act of measuring a company's operations and performance indicators against the industry's highest standards or optimal practices.

Industry Average

The standard or average benchmark of performance, costs, or pricing for businesses within a specific industry.