Calculate the total factory overhead to be charged to desk lamps.
A) $306,667
B) $235,000
C) $230,000
D) $225,000

Question

Quizplus · Accepted Answer

The given information provides the following:
- Total factory overhead costs = $250,000
- Direct labor cost for desk lamps = $100,000
- Machine hours used to manufacture desk lamps = 20,000
Using the predetermined overhead rate formula:
Predetermined overhead rate = Total factory overhead costs / Machine hours
= $250,000 / 20,000
= $12.50/hour
To calculate the overhead charged to desk lamps:
Overhead cost = Predetermined overhead rate x Actual machine hours used
= $12.50/hour x 18,800 machine hours used for desk lamps
= $235,000
Therefore, the best choice is B.

Calculate the Total Factory Overhead to Be Charged to Desk