Reference no: EM132507509

Question 1: Which of the following is a scenario in which multiple production department overhead rates should be used?

a. When one department relies more heavily on direct labor hours as an overhead driver than the other department

b. When two department both rely heavily on machine hours as an overhead driver

c. When two departments have vastly different raw materials procurement processes

d. When two departments have vastly different sales volumes and selling expenses

Question 2: Which of the following is one of the conditions indicating that using a single plantwide factory overhead rate may cause product cost distortions?

a. Differences in production department factory overhead rates

b. Differences between production for one period compared to production in the next period

c. Differences among total budgeted overhead and total budgeted allocation base amount

d. There are no specific conditions indicating that a single plantwide factory overhead rate may cause product distortions

Question 3: The total factory overhead for Simmons Company is budgeted for the year at $450,000 and divided into two departments: Fabrication, $315,000 and Assembly, $135,000. Simmons manufactures two products: chairs and tables. Each chair requires 1 direct labor hour in Fabrication and 3 direct labor hours in Assembly. Each table requires 3 direct labor hours in Fabrication and 6 direct labor hours in Assembly. Each product is budgeted for 3,750 units of production for the year. What would the factory overhead allocated per unit for each table be, using the department factory overhead allocation rates?

a. $63

b. $87

c. $60

d. $24