Question

Assume that Corn Co. sold 7,900 units of Product A and 2,100 units of Product B during the past year. The unit contribution margins for Products A and B are $26 and $60, respectively. Corn has fixed costs of $311,000. The break-even point in units is a. 14,077 units b. 7,508 units c. 11,261 units d. 9,384 units

Kaumajet Factory produces two products: table lamps and desk lamps. It has two separate departments: Fabrication and Assembly. The factory overhead budget for the Fabrication Department is $477,792, using 252,800 direct labor hours. The factory overhead budget for the Assembly Department is $518,569, using 80,900 direct labor hours. If a table lamp requires 2 hours of fabrication and 5 hour of assembly, the total amount of factory overhead that Kaumajet Factory will allocate to table lamps using the multiple production department factory overhead rate method with an allocation base of direct labor hours if 9,300 units are produced is a. $114,536 b. $59,613 c. $194,375 d. $333,219

Answer 1

Q1.
			A	B	Total
Units sold			7900	2100	10000
Multiply: Contribution margin per unit	26	60
Total contribution		205400	126000	331400
Divide: Total units				10000
Weighetd average contribution margin per unit	33.14
Fixed cost					311000
Divide: Weighted Average Contirbution per unit	33.14
Break even units				9384
Answer is d. 9384 units
Q2.
Oh rate per DLH
			Fabrication	Assembly
Total Budgeted Oh		477792	518569
Divide: Budgeted DLH	252800	80900
Oh rate per DLH		1.89	6.41
Oh allocated to table lamp
			fabrication	Assembly	Total
DLH per unit		2	5
Multiply: Total units		9300	9300
Total DLH required		18600	46500
Multiply: OH rate per DLH	1.89	6.41
OH allocated		35154	298065	333219
Answer is d. $ 333,219