Kaumajet Factory produces two products: table lamps and desk lamps. It has two separate departments: Fabrication...

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Kaumajet Factory produces two products: table lamps and desklamps. It has two separate departments: Fabrication and Assembly.The factory overhead budget for the Fabrication Department is$479,408, using 315,400 direct labor hours. The factory overheadbudget for the Assembly Department is $372,840, using 78,000 directlabor hours.
If a table lamp requires 4 hours of fabrication and 7 hour ofassembly, the amount of factory overhead that Kaumajet Factory willallocate to each unit of table lamp using the multiple productiondepartment factory overhead rate method with an allocation base ofdirect labor hours is
a.$10.93
b.$120.18
c.$4.78
d.$39.54

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4.2 Ratings (823 Votes)

--Correct Answer - Option 'D' $ 39.54 [$6.08 + 33.45]

		Fabrication	Assembly
A	Overhead	$479,408	$372,840
B	DLHs	315400	78000
C = A/B	Overhead rate	$ 1.52	$ 4.78
D	DLH used by table lamp	4	7
E = C x D	Amount of overhead allocated	$ 6.08	$ 33.46

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Transcribed Image Text

Kaumajet Factory produces two products: table lamps and desklamps. It has two separate departments: Fabrication and Assembly.The factory overhead budget for the Fabrication Department is$479,408, using 315,400 direct labor hours. The factory overheadbudget for the Assembly Department is $372,840, using 78,000 directlabor hours.If a table lamp requires 4 hours of fabrication and 7 hour ofassembly, the amount of factory overhead that Kaumajet Factory willallocate to each unit of table lamp using the multiple productiondepartment factory overhead rate method with an allocation base ofdirect labor hours isa.$10.93b.$120.18c.$4.78d.$39.54