Adirondak Marketing Inc. manufactures two products, A and B. Presently, the comp

Question

Adirondak 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. From the following information, calculate the plantwide factory overhead rate. Round to the nearest cent.

Select the correct answer.

Overhead Total
Direct
Labor Hours DLH per Product A B Painting Dept. $241,162 9,258 3 9 Finishing Dept. 82,880 10,092 6 7     Totals $324,042 19,350 9 16

Explanation / Answer

Total Overheads = $324042

Total Direct Labor Hours = 19350

Plant wide factory overhead rate = 324042/19350 = $16.75 per dlh

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