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ue Ridge Marketing Inc. manufactures two products, A and B. Presently, the company uses a single plantwide factory overhead rate for allocating overhead to products.
ue 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. | $256,000 | 9,700 | dlh | 3 | dlh | 11 | dlh | ||
Finishing Dept. | 78,000 | 11,200 | 4 | 8 | |||||
Totals | $334,000 | 20,900 | dlh | 7 | dlh | 19 | dlh |
Using a single plantwide rate, the factory overhead allocated per unit of Product B is
a.$15.98
b.$111.86
c.$303.62
d.$79.18
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