Blackwelder Factory produces two similar products-small lamps and desk lamps. The total plant overhead budget is...
Blackwelder Factory produces two similar products-small lamps and desk lamps. The total plant overhead budget is $656,000 with 464,000 estimated direct labor hours. It is further estimated that small lamp production will require 291,000 direct labor hours and desk lamp production will need 173,000 direct labor hours.
Using the single plantwide factory overhead rate with an allocation base of direct labor hours, how much factory overhead will Blackwelder Factory allocate to desk lamp production if actual direct hours for the period is 196,000.
a.$973,959
b.$276,360
c.$743,214
d.$379,640
Homework Answers
Answer: Option b $276,360
Working:
Predetermined overhead rate for desk lamp = Estimated overhead budget/Estimated DLH
$656,000 / 464,000 = $ 1.41 per DLH
Applied /allocated overhead = Actual hours* predetermined overhead rate per hour
196,000 hours * $1.41 = $ 276,360
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