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 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 the estimated overhead and direct labor hours.
Overhead Direct Labor Hours (dlh) Product A B Painting Dept. $256,200 11,400 dlh 14 dlh 6 dlh Finishing Dept. 76,300 9,000 2 20 Totals $332,500 20,400 dlh 16 dlh 26 dlh
Determine the overhead in the Painting Department for each unit of Product B if Blue Ridge Marketing Inc. uses a multiple department rate system.
a.$134.82 per unit b.$97.79 per unit c.$50.87 per unit d.$22.47 per unit
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