Question
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. Overhead Direct Labor Hours (dih) Product A B Painting Dept. Finishing Dept. Totals $252,400 10,200 dlh. 16 dihi 3 dlh 70,500 $322,900 9,600 3 15 19,800 dihi 19 dih 18 dihi The factory overhead allocated per unit of Product B in the Painting Department if Blue Ridge Marketing Inc. uses the multiple production department factory overhead rate method is Oa. $22.03 per unit Ob. $74.25 per unit Oc. $24.75 per unit Od. 148.92 per unit
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