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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.

Overhead

Direct Labor Hours (dlh)

Product

A

B

Painting Dept.

$248,000

10,000 dlh

16 dlh 4 dlh
Finishing Dept.

72,000

10,000

4 16
Totals

$320,000

20,000 dlh

20 dlh 20 dlh

Using a single plantwide rate, determine the overhead rate per unit for Blue Ridge Marketing Inc.'s Product B.

Select one:

a.

$496.00

b.

$144.00

c.

$640.00

d.

$320.00

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