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Adirondak Marketing Inc. manufactures two products, A and B. Presently, the company uses a single plantwide factory overhead rate for allocating overhead to products. However,
Adirondak Marketing Inc. manufactures two products, A and B. Presently, the company uses a single plantwide factory overhead rate for allocating overhead to products. However, management is considering moving to a multiple department rate system for allocating overhead.
| Overhead | Total Direct Labor Hours | DLH per Product | ||
| A | B | |||
| Painting Dept. | $250,000 | 10,000 | 16 | 4 |
| Finishing Dept. | 75,000 | 12,000 | 4 | 16 |
| Totals | $325,000 | 22,000 | 20 | 20 |
Calculate the plantwide factory overhead rate for Adirondack Marketing Inc.
| a. | $ 6.25 per dlh | |
| b. | $14.77 per dlh | |
| c. | $0.07 per dlh | |
| d. | $25.00 per dlh |
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