Asked by Patricia Tucker’Hicks on Apr 28, 2024
Verified
Using a single plantwide factory overhead rate with an allocation base of direct labor hours, the factory overhead that Blackwelder Factory will allocate to desk lamp production if actual direct labor hours for the period for desk lamps is 118,000 would be
A) $118,000
B) $200,000
C) $188,800
D) $125,000
Single Plantwide Factory Overhead Rate
A method of allocating factory overhead to products based on a single, consistent rate applicable throughout the entire manufacturing plant.
Direct Labor Hours
The total hours worked by employees directly involved in the manufacturing process, often used as a basis for allocating factory overhead.
Desk Lamp Production
The process involving the assembly, testing, and packaging of desk lamps for consumer use.
- Engage in multiple approaches for allocating factory overhead expenses, such as the single plantwide rate and departmental rates.
Verified Answer
ZK
Zybrea KnightMay 04, 2024
Final Answer :
C
Explanation :
The plantwide factory overhead rate is calculated as total factory overhead divided by total estimated direct labor hours: $640,000 / 400,000 hours = $1.60 per direct labor hour. For desk lamps, with actual direct labor hours of 118,000, the allocated factory overhead would be 118,000 hours * $1.60/hour = $188,800.
Learning Objectives
- Engage in multiple approaches for allocating factory overhead expenses, such as the single plantwide rate and departmental rates.