lue 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. $259,500 10,600 dlh 12 dlh 7 dlh Finishing Dept. 72,700 8,000 2 16 Totals $332,200 18,600 dlh 14 dlh 23 dlh The factory overhead allocated per unit of Product B in the Painting Department if Blue Ridge Marketing Inc. uses the multiple production department factory overhead rate method is a.$63.61 per unit b.$125.02 per unit c.$24.48 per unit d.$171.36 per unit
lue 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. $259,500 10,600 dlh 12 dlh 7 dlh Finishing Dept. 72,700 8,000 2 16 Totals $332,200 18,600 dlh 14 dlh 23 dlh The factory overhead allocated per unit of Product B in the Painting Department if Blue Ridge Marketing Inc. uses the multiple production department factory overhead rate method is a.$63.61 per unit b.$125.02 per unit c.$24.48 per unit d.$171.36 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. | $259,500 | 10,600 | dlh | 12 | dlh | 7 | dlh | ||
| Finishing Dept. | 72,700 | 8,000 | 2 | 16 | |||||
| Totals | $332,200 | 18,600 | dlh | 14 | dlh | 23 | dlh |
The factory overhead allocated per unit of Product B in the Painting Department if Blue Ridge Marketing Inc. uses the multiple production department factory overhead rate method is
a.$63.61 per unit
b.$125.02 per unit
c.$24.48 per unit
d.$171.36 per unit
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