The Baffin Factory Has Determined That Its Budgeted Factory Overhead

question 13

Multiple Choice

The Baffin Factory has determined that its budgeted factory overhead budget for the year is $7,750,000. They plan to produce 1,000,000 units. Budgeted direct labor hours are 525,000 and budgeted machine hours are 375,000. Using the single plantwide factory overhead rate based on direct labor hours, calculate the factory overhead rate for the year.

• A) $14.76
• B) $20.67
• C) $7.75
• D) $77.50

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Definitions:

Divide

The process of splitting a number into equal parts or groups, or finding how many times one number is contained within another.

Multiply

The arithmetic operation of scaling one number by another, essentially repeated addition.

Multiply

The arithmetic process of calculating the result of adding a number to itself a certain number of times.

Simplify

To simplify means to reduce an expression or equation to its simplest form, by combining like terms, reducing fractions, etc.