Calculato Challenger Factory produces two similar products -regular widgets and

Question

Calculato Challenger Factory produces two similar products -regular widgets and deluxe widgets. The total plant overhead budget is $675,000 with 300,000 estimated direct abor hours. It is further estimated that deluxe widget production will need 3 direct labor hours for each unit and regular widget production will require 2 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 perlod is 75,000 units and actual production for the period is 72,000 units? Oa. $168,75o Ob. $324,000 Oc $337,500 Od. $162,000

Explanation / Answer

Answer is D

Particulars Amt Budgeted Overhead (A) 675000 Budgeted Hours (B) 300000 Overhead Per Hour (C = A/B) 2.25 Actual Production (D) 72000 Overhead Applied (C x D) 162000

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