Question

The Nite Lite Company manufacture small lamps and desk lamps.

Set-Ups Inspections Assembly (DLH)
Small Lamps-4000 units 4,000 16,000 4,000
Desk Lamps-8000 units 16,000 8,000 12,000
Using the following information prepared by the Nite Lite Company, what is the total factory overhead rate to be charged to desk lamps.
Activity Pool Activity Base Budgeted amound
Set-ups 24,000 $ 60,000
Inspections 24,000 120,000
Assembly (DLH) 28,000 280,000

Answer 1

Total factory overhead rate = $200,000

Step-by-step explanation:

Total overhead allocated to Desk lamps

Desk lamps Amount

Setups 60,000/24,000 * 16,000 = 40,000

Inspections 120,000 /24,000 * 8,000 = 40,000

Assembly 280,000/28,000 * 12,000 = 120,000

Total factory overhead rate = $200,000