Challenger Factory produces two similar products - regular widgets and deluxe wi

Question

Challenger Factory produces two similar products - regular widgets and deluxe widgets. The total plant overhead budget is $510,600 with 357,100 estimated direct labor hours. It is further estimated that deluxe widget production will need 2 direct labor hours for each unit and regular widget production will require 5 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 deluxe widget production if budgeted production for the period is 41,500 units and actual production for the period is 58,000 units? Oa. $165,880 b. $370,868 Oc. $415,372 Od. $89,008

Explanation / Answer

a) $165,880 As per chegg guidelines we answer one question per post. Dear Student Thank you for using Chegg Please find below the answer Statementshowing Computations Paticulars Amount Plant overhead budget            510,600.00 Estimated direct labour hours            357,100.00 Plantwide factory overhead Rate per direct labour hour                         1.43 Budegted production of deluxe Widget              58,000.00 Hours per widget                         2.00 Direct labour hours            116,000.00 Overhead allocated to deluxe widget prod'n = 116000 * 1.43            165,880.00

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