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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 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 estimated overhead and direct labor hours. Product Direct Labor Hours (dlh) Overhead A B Painting Dept. $427,950 13,500 din 15 dih 6 dih Finishing Dept. 112,402 8,600 5 15 Totals $540,352 22,100 din 20 dih 21 dlh Determine the overhead from both production departments allocated to each unit of Product A if Blue Ridge Marketing Inc. uses a multiple department rate system. Oa. $386.25 per unit Ob. $31.70 per unit Oc. $540.85 per unit Od. $13.07 per unit
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