Question
Wever Ridge Marketing Inc. manufactures multiple products, but two specifically, products, A and B. Presently, the company uses a single plantwide factory overhead rate for
Wever Ridge Marketing Inc. manufactures multiple products, but two specifically, 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.
|
|
| Estimated Direct Labor Hours (dlh) Per Dept | Product Usage of DLH |
| Departments | Overhead |
| Product A | Product 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 |
Determine the overhead rate in the Painting Department.
| A. | $12.40 per dlh | |
| B. | $24.80 per dlh | |
| C. | $7.20 per dlh | |
| D. | $16.00 per dlh |
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Advanced Financial Accounting
Authors: Theodore Christensen, David Cottrell, Cassy Budd
13th Edition
1260772136, 9781260772135
