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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
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. Painting Dept. Finishing Dept. Overhead $248,000 Direct Labor Hours (dih) Product A B 10,000 dih 16 dih 4 dh Totals 72,000 $320,000 10,000 4 16 20,000 dih 20 dlh 20 dih The overhead from both production departments allocated to each unit of Product B if Blue Ridge Marketing Inc. uses the multiple production department factory overhead rate method is Oa. $214.40 per unit Ob. $425.60 per unit c. $320.00 per unit) Od. $115.20 per unit
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