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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. Direct Product Overhead Labor Hours (dlh) A B Painting Dept. $324,649 11,300 dih 15 dlh 4 dlh Finishing Dept. 53,040 5,200 4 17 Totals $377,689 16,500 dih 19 dlh 21 dlh The overhead from both production departments allocated to each unit of Product B if Blue Ridge Marketing Inc. uses the multiple production department factory overhead rate method is a. $28.73 per unit Ob. $471.75 per unit c. $288.32 per unit Od. $10.20 per unit
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