FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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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.

$248,000

10,000 dlh

  16 dlh     4 dlh
Finishing Dept.

  72,000

    10,000         

       4            16     
   Totals

$320,000

20,000 dlh

  20 dlh    20 dlh


Using a single plantwide rate, determine the overhead rate per unit for Blue Ridge Marketing Inc.'s Product B.

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