Spotted Cow Dairy Company manufactures three products: whole milk, skim milk, and cream, in two production, blending, and packing departments. Factory overhead for Spotted Cow Dairy is $425,500. The three products consume machine hours and direct labor hours in the two production departments as follows: Direct Labor Hours Machine Hours Manufacturing Department milkshake Whole milk 750 1030 Skim milk 480 830 Cream 370 640 1600 2500 Packaging department Whole milk 220 1540 Skim milk 230 950 Cream 220 1,010 670 3,500 Total 2,270 6,000

Management of the Spotted Cow Dairy Company now plans to use the multi-department factory overhead rate method. The total factory overhead costs associated with each department are as follows:

mixing department	$240,000
packaging department	185.500
Total	$425,500

Required:

If necessary, round all amounts to the nearest dollar.

1. Determine the factory overhead rates for the multiple production department, using direct labor hours for the Mixing Department and machine hours for the Packaging Department.

2. Determine the factory overhead costs of the product, using the rates for multiple production departments in (1).

Answer rating: 100% (QA)

1 Mixing Department Factory overhead rate 240000 227... View the full answer