Kleinveld Inc. The Machinery Department and Assembly Department Are Two Producing Departments

question 1

Multiple Choice

Kleinveld Inc.
The Machinery department and Assembly department are two producing departments in Kleinveld Inc. Machinery’s total overhead is $30 000, using 200 machine hours and 500 direct labour hours. Assembly’s total overhead cost is $45 000, using 300 machine hours and 500 direct labour hours. The Machinery department overhead cost driver for product cost allocation is machine hours, while the Assembly department uses direct labour hours to allocate overhead costs to products.
-What is the overhead allocated to a product that uses 4 machine hours in both departments?

• A) $1200
• B) $600
• C) $1500
• D) $960

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Definitions:

Tax Rate

The proportion of income that a person or business must pay in taxes.

Digressive

Characteristics of a process or system that decreases in intensity or rate as it progresses.

Social Security (FICA) Tax

A mandatory payroll tax funded by both employers and employees to finance Social Security benefits.

Annual Income

The total amount of money earned by an individual or entity within a year from all sources, including wages, salaries, bonuses, and investments.