Rose, Inc., a factory that produces two different fragrances, rose and lilac, is considering switching their suppliers, and you are attempting to calculate total Manufacturing Overhead (MOH) to get an accurate picture of their budget. Under their traditional costing system, they had the following costs: Rose Fragrance: Glass Bottles, $78,000; Fragrance, $28,540; Bottler Wages, $76,000; and Assembly Line Wages, $26,578; and Lilac Fragrance: Glass Bottles, $118,648; Fragrance, $33,620; Bottler Wages, $84,350; and Assembly Line Wages, $33,668. The manufacturing overhead for each fragrance will be 86% of their Direct Labor (DL) costs. They produced 28,400 glass bottles of rose fragrance and 43,200 glass bottles of lilac fragrance during the period. What is their total allocated MOH for the lilac fragrance?
A) $88,217.08
B) $101,495.48
C) $118,018.00
D) $130,950.48

Question

Quizplus · Accepted Answer

This question requires you to calculate the allocated MOH for the lilac fragrance. Before solving for MOH, identify what costs would be attributed to Direct Labor. Further, ensure that only the costs of the lilac fragrance are taken into consideration. $101,495.48 (Choice B) correctly takes 86% of DL ($84,350 + $33,668) to calculate MOH ($118,018 × 0.86).

Rose, Inc, a Factory That Produces Two Different Fragrances, Rose and and Lilac