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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.
Overhead | Direct Labor Hours (dlh) | Product | ||
A | B | |||
Painting Dept. | $248,000 | 10,000 dlh | 16 dlh | 4 dlh |
Finishing Dept. | 72,000 | 10,000 | 4 | 16 |
Totals | $320,000 | 20,000 dlh | 20 dlh | 20 dlh |
Using a single plantwide rate, determine the overhead rate per unit for Blue Ridge Marketing Inc.'s Product B.
a.$640.00
b.$496.00
c.$144.00
d.$320.00
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