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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. Overhead Direct Labor Hours (dih) Product A B Painting Dept. $255,900 11,100 dih 13 dlh 7 dih Finishing Dept. 71,400 7,600 4 15 Totals $327,300 18,700 dih 17 dih 22 dih 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. $65.76 per unit Ob. $122.52 per unit Oc. $161.35 per unit Od. $23.05 per unit
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