The Total Factory Overhead for Big Light Company Is Budgeted

question 36

Essay

The total factory overhead for Big Light Company is budgeted for the year at $403,750. Big Light manufactures two different products - night lights and desk lamps. Night lights is budgeted for 30,000 units. Each night light requires 1/2 hour of direct labor. Desk lamps is budgeted for 40,000 units. Each desk lamp requires 2 hours of direct labor. Determine (a) the total number of budgeted direct labor hours for year, (b) the single plantwide factory overhead rate using direct labor hours as the allocation base, and (c) the factory overhead allocated per unit for each product using the single plantwide factory overhead rate calculated in (b).

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Definitions:

Farm Employment

Refers to labor and jobs associated with agriculture, including planting, maintenance, and harvesting of crops.

Declining Industry

An industry experiencing a long-term drop in output, sales, or employment.

Lagging Technology

Technology that is behind the current standard or trend, often outdated or rendered obsolete by new innovations.