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  3. problem 327 costs have been compiled for a certain manufacturing...

Question: problem 327 costs have been compiled for a certain manufacturing...

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Problem 3.27

Costs have been compiled for a certain manufacturing company for the most recent year. The summary is shown in the table below. The company operates two different manufacturing plants, plus a corporate headquarters. Determine (a) the factory overhead rate for each plant, and (b) the corporate overhead rate. The firm will use these rates in the following year.

Expense category

                   Plant 1

                        Plant 2

           Corporate  HQ                                                   

Direct labor

$1,000,000

$1,750,000

Materials

$3,500,000

$4,000,000

Factory expense

$1,300,000

$2,300,000

Corporate expense

                                                         $5,000,000

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