Blackwelder Factory produces two similar products - small lamps and desk lamps.

Question

Blackwelder Factory produces two similar products - small lamps and desk lamps. The total plant overhead budget is $640,000 with 400,000 estimated direct labor hours. It is further estimated that small lamp production will require 275,000 direct labor hours and desk lamp production will need 125,000 direct labor hours. Using the single plantwide factory overhead rate with an allocation base of direct labor hours, how much factory overhead will be allocated to the desk lamp production if the actual direct hours for the period is 118,000? A. $118,000 B. $200,000 C. $188,800 D. $125,000

Explanation / Answer

actory overhead will be allocated to the desk lamp production if the actual direct hours for the period= total plant overhead budget is $640,000/ 400,000 estimated direct labor hours* actual direct hours for the period is 118,000=$188,800

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