Blue Ridge Marketing Inc. manufactures two products, A and B. Presently, the company uses a...
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Accounting
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. | $411,768 | 12,900 | dlh | 15 | dlh | 2 | dlh | ||
| Finishing Dept. | 79,317 | 6,300 | 7 | 17 | |||||
| Totals | $491,085 | 19,200 | dlh | 22 | dlh | 19 | dlh | ||
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.$31.92 per unit
b.$12.59 per unit
c.$277.87 per unit
d.$566.93 per unit
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