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. Painting Dept. Finishing Dept. Totals Overhead $253,600 61,900 $315,500 Direct Labor Hours (dlh) 10,400 dlh 12,000 22,400 dlh Product A 7 dlh 5 12 dlh B 11 dlh 8 19 dlh Using a single plantwide rate, the factory overhead allocated per unit of Product B is Oa. $170.69 Ob. $168.96 Oc. $267.52 Od. $14.08
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. Painting Dept. Finishing Dept. Totals Overhead $253,600 61,900 $315,500 Direct Labor Hours (dlh) 10,400 dlh 12,000 22,400 dlh Product A 7 dlh 5 12 dlh B 11 dlh 8 19 dlh Using a single plantwide rate, the factory overhead allocated per unit of Product B is Oa. $170.69 Ob. $168.96 Oc. $267.52 Od. $14.08
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Blue Ridge Marketing Inc. manufactures two products, A and B. Presently, the company uses a single plantwide factory
Transcribed Image Text: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.
Painting Dept.
Finishing Dept.
Totals
Overhead
$253,600
61,900
$315,500
Direct
Labor Hours (dlh)
10,400 dlh
12,000
22,400 dlh
Product
A
7 dlh
5
12 dlh
B
11 dlh
8
19 dlh
Using a single plantwide rate, the factory overhead allocated per unit of Product B is
Oa. $170.69
Ob. $168.96
Oc. $267.52
Od. $14.08
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