Question

Challenger Factory produces two similar products - regular widgets and deluxe widgets. The total plant overhead budget is $566,800 with 383,800 estimated direct labor hours. It is further estimated that deluxe widget production will need 5 direct labor hours for each unit and regular widget production will require 4 direct labor hours for each unit.

Using the single plantwide factory overhead rate with an allocation base of direct labor hours, how much factory overhead will Challenger Factory allocate to regular widget production if budgeted production for the period is 75,000 units and actual production for the period is 124,700 units?

a.$920,792

b.$141,700

c.$738,224

d.$184,158

Answer 1

Correct answer-----------d.$184,158

Working

(A)	Budgeted Manufacturing Overheads	$ 566,800
(B)	Budgeted Direct labor hours	383,800
C= (A/B)	Predetermined Overhead rate	$              1.48
(D)	Actual Direct labor hours	124,700
E=(DxC)	Overheads Applied	$ 184,158