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 DirectLabor Hours (dlh) Product A B Painting Dept. $514,836 12,600 dlh 13 dlh 4 dlh Finishing Dept. 64,719 8,100 4 18 Totals $579,555 20,700 dlh 17 dlh 22 dlh Determine the overhead from both production departments allocated to each unit of Product A if Blue Ridge Marketing Inc. uses a multiple department rate system. a.$40.86 per unit b.$307.26 per unit c.$563.14 per unit d.$7.99 per unit
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 DirectLabor Hours (dlh) Product A B Painting Dept. $514,836 12,600 dlh 13 dlh 4 dlh Finishing Dept. 64,719 8,100 4 18 Totals $579,555 20,700 dlh 17 dlh 22 dlh Determine the overhead from both production departments allocated to each unit of Product A if Blue Ridge Marketing Inc. uses a multiple department rate system. a.$40.86 per unit b.$307.26 per unit c.$563.14 per unit d.$7.99 per unit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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. | $514,836 | 12,600 | dlh | 13 | dlh | 4 | dlh | ||
| Finishing Dept. | 64,719 | 8,100 | 4 | 18 | |||||
| Totals | $579,555 | 20,700 | dlh | 17 | dlh | 22 | dlh |
Determine the overhead from both production departments allocated to each unit of Product A if Blue Ridge Marketing Inc. uses a multiple department rate system.
a.$40.86 per unit
b.$307.26 per unit
c.$563.14 per unit
d.$7.99 per unit
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