FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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  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. $309,088   10,400 dlh   12 dlh 3 dlh
    Finishing Dept. 46,852   5,300     6   16  
        Totals $355,940   15,700 dlh   18 dlh 19 dlh

    The overhead from both production departments allocated to each unit of Product B if Blue Ridge Marketing Inc. uses the multiple production department factory overhead rate method is

    a.$230.60 per unit
    b.$8.84 per unit
    c.$29.72 per unit
    d.$409.68 per unit
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