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Blue Ridge Marketing Inc. manufactures two products, A and B. Presently, the company uses a single plantwide factory overhead rate for allocating overhead to products.
Blue Ridge 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. The following table presents information about estimated overhead and direct labor hours. Product Direct Labor Hours (dih) Overhead A B Painting Dept. $247,300 10,800 dlh 4 dlh 8 dlh Finishing Dept. 76,800 10,000 5 8 Totals $324,100 20,800 dih 9 dih 16 dlh Using a single plantwide rate, the factory overhead allocated per unit of Product B is Oa. $91.59 Ob. $249.28 Oc. $15.58 Od. $140.22
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