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. Direct Overhead Labor Hours (dlh) Painting Dept. Finishing Dept. Totals Product A 16 dlh $248,000 72,000 $320,000 Using a single plantwide rate, the factory overhead allocated per unit of Product B is O a. $640 O b. $496 Oc. $320 O d. $144 10,000 dlh 10,000 20,000 dlh 4 Product B 20 dih 4 dlh 16 20 dlh
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. Direct Overhead Labor Hours (dlh) Painting Dept. Finishing Dept. Totals Product A 16 dlh $248,000 72,000 $320,000 Using a single plantwide rate, the factory overhead allocated per unit of Product B is O a. $640 O b. $496 Oc. $320 O d. $144 10,000 dlh 10,000 20,000 dlh 4 Product B 20 dih 4 dlh 16 20 dlh
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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