16. Blue Ridge Marketing Inc. manufactures two products, A and B. Presently, the
ID: 2598453 • Letter: 1
Question
16.
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.
Determine the overhead from both production departments allocated to each unit of Product B if Blue Ridge Marketing Inc. uses a multiple department rate system.
a. $567.96 per unit
b. $33.66 per unit
c. $325.95 per unit
d. $10.51 per unit
Overhead Direct
Labor Hours (dlh) Product A B Painting Dept. $467,874 13,900 dlh 15 dlh 5 dlh Finishing Dept. 78,825 7,500 6 15 Totals $546,699 21,400 dlh 21 dlh 20 dlh
Explanation / Answer
Painting Dept. Overhead rate = 467874/13900= 33.66 Finishing Dept. Overhead rate = 78825/7500= 10.51 Overhead allocated to each unit of Product B = (5*33.66)+(15*10.51)= 325.95 Option C is correct
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.