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. Product Overhead Direct Labor Hours (dih) A B Painting Dept. Finishing Dept. $245,600 8,100 dlh 12 dlh 3 dlh Totals 71,300 $316,900 8,500 4 16 16,600 dlh 16 dlh 19 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. $57.27 per unit Ob. $30.32 per unit Oc. $90.96 per unit Od. $25.16 per unit
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