If the Budget Estimates That a Table Lamp Will Require

question 97

Multiple Choice

If the budget estimates that a table lamp will require 2 hours of finishing and 1 hours of production,what is the total amount of factory overhead the Kaumajet Factory will allocate to table lamps using the multiple production department factory overhead rate method with an allocation base of direct labor hours,if 75,000 units are produced?

• A) $368,250
• B) $540,000
• C) $832,500
• D) $475,000

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Definitions:

Production

The act of developing, expanding, producing, or enhancing products and services.

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to individual products or job orders based on a certain activity base.

Direct Materials

Raw materials that are traceable directly to the finished product in the manufacturing process.

Manufacturing Overhead

Costs related to the manufacturing process that are not directly tied to the product being made, such as the cost of maintaining factory equipment.