Question

PART 1

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.	$295,728		10,100	dlh		14	dlh	2	dlh
Finishing Dept.	88,350		7,500			2		15
Totals	$384,078		17,600	dlh		16	dlh	17	dlh

Determine the overhead from both production departments allocated to each unit of Product A if Blue Ridge Marketing Inc. uses a multiple department rate system.

a.$235.26 per unit

b.$29.28 per unit

c.$11.78 per unit

d.$433.48 per unit

PART 2

The following production data were taken from the records of the Finishing Department for June:

Inventory in process, June 1 (34% completed)	5,500	units
Completed units during June	57,800	units
Ending inventory (59% complete)	3,800	units

What is the number of conversion equivalent units of production in the June 30 Finishing Department inventory, assuming that the first-in, first-out method is used to cost inventories?

a.56,100 units

b.2,242 units

c.52,300 units

d.61,600 units

Answer 1

Answer

Hence the Option D is correct