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 50,000 units and actual production for the period is 58,000 units?
A) $391,500
B) $225,000
C) $261,000
D) $337,500

Question

Quizplus · Accepted Answer

The factory overhead is allocated based on actual production, which is 58,000 units. The single plantwide factory overhead rate is calculated using the budgeted production of 50,000 units. The correct allocation is $391,500, which corresponds to the actual production multiplied by the overhead rate per unit.

Using the Single Plantwide Factory Overhead Rate with an Allocation