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

question 37

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 if the company uses a plantwide rate based on machine hours and a product uses 4 machine hours?

• A) $600
• B) $0
• C) $360
• D) $960

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