Question: Choice of Cost-Allocation Base at Enriquez Machine Parts Company Refer to the chapter discussion of Enriquez Machine Parts Company beginning. Suppose Enriquez decided to use only one overhead cost pool for both departments with direct labor cost as the single cost-allocation base.
1. Compute the budgeted overhead application rate for the factory using the budgeted data.
2. If Enriquez incurred $190,000 of direct labor cost during 20X0, what was the total factory overhead applied to products?
3. The applied factory overhead based on separate application rates for the machining and assembly departments was $375,000. Explain why this amount is different than the applied amount from requirement 2.