Question

Dawson Company manufactures small table lamps and desk lamps. The following shows the activities per product...

Dawson Company manufactures small table lamps and desk lamps. The following shows the activities per product and the total overhead information:

Units Setups Inspections Assembly (dlh)
Small table lamps 3,400   4,000   9,300   44,400    
Desk lamps 8,400   8,000   15,500   44,400    
Activity Total Activity-Base Usage Budgeted Activity Cost
Setups 12,000                 $130,800            
Inspections 24,800                 158,720            
Assembly (dlh) 77,700                 357,420            

The total factory overhead to be allocated to desk lamps is?

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Answer #1
Calculation of Activity Rates (Amounts in $)
Activity Activity Cost (A) Activity Driver Total Activity Base Usage( B) Activity Rate (A/B)
Setup $130,800.00 No. of Setup 12,000 $10.90
Inspection $158,720.00 No. of Inspection 24,800 $6.40
Assembly $357,420.00 No. of DLH 77,700 $4.60
Computation of Factory Overhead Allocated to Desk Lamp
Activity Activity Rate (A) Activity Base Usage-Desk Lamp ( B) Allocated Oerhead
(AXB)
Setup $10.90 8000 $87,200.00
Inspection $6.40 15500 $99,200.00
Assembly $4.60 44400 $204,240.00
Total Allocated Overhead $390,640.00
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