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. A Painting Dept. Finishing Dept. Overhead B $248,000 72,000 Direct Labor Hours (dlh) 10,000 dlh 10,000 Product 16 dlh 4 4 dlh 16
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. A Painting Dept. Finishing Dept. Overhead B $248,000 72,000 Direct Labor Hours (dlh) 10,000 dlh 10,000 Product 16 dlh 4 4 dlh 16
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
A
Painting
Dept.
Finishing
Dept.
Totals
Overhead
B
$248,000
72,000
$320,000
Direct
Labor
Hours
(dlh)
10,000
dlh
10,000
20,000
dlh
Product
16 dlh
4
20 dlh
4
dlh
16
20
dlh
Using a single plantwide rate, determine the overhead
rate per unit for Blue Ridge Marketing Inc.'s Product B.
Group of answer choices
$640.00
$496.00
$144.00
$320.00
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