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:

Accounting Information System

A structure that collects, stores, manages, processes, retrieves, and reports financial data for its users, facilitating informed business decisions.

Financial Accounting

The process of recording, summarizing, and reporting the myriad of transactions resulting from business operations over a period of time, in order to produce financial statements.

LIFO

Last In, First Out, an inventory valuation method where the most recently produced items are recorded as sold first.