Condoleezza Co. manufactures two products, A and B, in two production departments, Assembly and Finishing. Condoleezza Co. expects to produce 10,000 units of Product A and 20,000 units of Product B in the coming year. Budgeted factory overhead costs for the coming year are: The machine hours expected to be used in the coming year are as follows:
a.Compute the plantwide factory overhead rate, assuming the single plantwide factory overhead rate method is used.
b.Compute the production department factory overhead rates, assuming the multiple production department factory overhead rate method is used.
c.Compute the factory overhead allocated per unit for each product using (1) the single plantwide rate and (2) production department factory overhead rates.
d.Which method is better (single or multiple)? Why?

Question

Condoleezza Co. manufactures two products, A and B, in two production departments, Assembly and Finishing. Condoleezza Co. expects to produce 10,000 units of Product A and 20,000 units of Product B in the coming year. Budgeted factory overhead costs for the coming year are:  The machine hours expected to be used in the coming year are as follows:  
a.Compute the plantwide factory overhead rate, assuming the single plantwide factory overhead rate method is used.
b.Compute the production department factory overhead rates, assuming the multiple production department factory overhead rate method is used.
c.Compute the factory overhead allocated per unit for each product using (1) the single plantwide rate and (2) production department factory overhead rates.
d.Which method is better (single or multiple)? Why?

Quizplus · Accepted Answer

The Answer of Condoleezza Co. manufactures two products, A and B, in two production departments, Assembly and Finishing. Condoleezza Co. expects to produce 10,000 units of Product A and 20,000 units of Product B in the coming year. Budgeted factory overhead costs for the coming year are:  The machine hours expected to be used in the coming year are as follows:  
a.Compute the plantwide factory overhead rate, assuming the single plantwide factory overhead rate method is used.
b.Compute the production department factory overhead rates, assuming the multiple production department factory overhead rate method is used.
c.Compute the factory overhead allocated per unit for each product using (1) the single plantwide rate and (2) production department factory overhead rates.
d.Which method is better (single or multiple)? Why?