Question

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. Product Direct Labor Hours (din) Overhead A B Painting Dept $243,700 11,300 dith 12 din 6 dih Finishing Dept 72,400 7,100 7 20 Total $316,100 18,400 din 19 d 26 dih The factory overhead allocated per unit of Product B in the Painting Department il Blue Ridge Marketing Inc. uses the multiple production department factory overhead rate method is a. $21.57 per unit Ob. $129.42 per unit OC 5103.08 per unit Od: 561.18 per un

Answer 1

b.$129.42.

working;

painiting department overhead rate = overhead / direct labor hours

=>$243,700 / 11,300

=>$21.57.

Allocation to product B =overhead rate * direct labor hours per unit

$21.57 * 6 hours

=>$129.42.