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. $374,640 11,200 dlh 16 dlh 2 dlh Finishing Dept. 100,440 8,100 7 17 Totals $475,080 19,300 dlh 23 dlh 19 dlh The overhead from both production departments allocated to each unit of Product A if Blue Ridge Marketing Inc. uses the multiple
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. $374,640 11,200 dlh 16 dlh 2 dlh Finishing Dept. 100,440 8,100 7 17 Totals $475,080 19,300 dlh 23 dlh 19 dlh The overhead from both production departments allocated to each unit of Product A if Blue Ridge Marketing Inc. uses the multiple
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 4E: Isaac Engines Inc. produces three productspistons, valves, and camsfor the heavy equipment industry....
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Blue Ridge Marketing Inc. manufactures two products, A and B. Presently, the company uses a single plantwide factory
Overhead |
Direct Labor Hours (dlh) |
Product | |||||||
A | B | ||||||||
Painting Dept. | $374,640 | 11,200 | dlh | 16 | dlh | 2 | dlh | ||
Finishing Dept. | 100,440 | 8,100 | 7 | 17 | |||||
Totals | $475,080 | 19,300 | dlh | 23 | dlh | 19 | dlh |
The overhead from both production departments allocated to each unit of Product A if Blue Ridge Marketing Inc. uses the multiple production department factory overhead rate method is
a.$622.00 per unit
b.$33.45 per unit
c.$277.70 per unit
d.$12.40 per unit
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