The Kaumajet Factory Produces Two Products - Table Lamps and Desk

question 79

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 table lamp will require 2 hours of finishing and 1 hours of production, how much factory overhead will be allocated to each unit of table lamp using the multiple production department factory overhead rate method with an allocation base of direct labor hours?

• A) $6.33
• B) $4.91
• C) $5.00
• D) $7.20

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Definitions:

Retail Credit Company

A company specializing in the issuance and management of credit to consumers, often directly linked to specific retail stores or brands.

Work-in-Progress

Inventory that includes goods in the process of being manufactured but not yet completed.

Raw Timber

Unprocessed wood that has been harvested from trees and is typically used for construction, manufacturing, or paper products.

Finished Goods

Products that have completed the manufacturing process and are ready to be sold to customers.