**Wiley Inc. Allocation of Overhead Costs**Wiley Inc. produces two products, A and B. Currently, the company utilizes a single plantwide factory overhead rate for allocating overhead to products. However, management is considering adopting a multiple-department rate system for allocating overhead. The present method employs a single plantwide factory overhead rate.**Department Overhead and Labor Hours:**- **Painting Department:** - Overhead: $250,000 - Total Direct Labor Hours: 10,000- **Finishing Department:** - Overhead: $75,000 - Total Direct Labor Hours: 12,000- **Totals:** - Overhead: $325,000 - Total Direct Labor Hours: 22,000**Direct Labor Hours (DLH) per Product:**- **Product A:** - Painting: 16 - Finishing: 4 - Total: 20- **Product B:** - Painting: 4 - Finishing: 16 - Total: 20**Proposed Overhead Rates:**1. **$14.77 per DLH**2. **$20.77 per DLH**3. **$25.00 per DLH**(Note: The correct overhead rate is not shown in the options provided.) Using a single plantwide rate and data from Wiley Inc, the factory overhead allocated per unit of Product A in the Painting Department is:- $147.70 per unit- $295.45 per unit- $236.32 per unit- $161.00 per unit

Single plantwide predetermined overhead rate = Overhead cost / Total DLHs

Wiley Inc. produces two products, A and B. Presently, the company utilizes 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 current single plantwide factory overhead rate for Wiley is: Total DLH per Product Direct Labor Hours 10,000 12,000 22,000 Overhead B 4. $250,000 75,000 $325,000 16 Painting Dept. Finishing Dept. Totals 4. 16 20 20 %3D O Answer not shown O $14.77 per dlh O 520.77 per dih O $25.00 per dih

Wiley Inc. produces two products, A and B. Presently, the company utilizes 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 current single plantwide factory overhead rate for Wiley is: Total DLH per Product Direct Labor Hours 10,000 12,000 22,000 Overhead B 4. $250,000 75,000 $325,000 16 Painting Dept. Finishing Dept. Totals 4. 16 20 20 %3D O Answer not shown O $14.77 per dlh O 520.77 per dih O $25.00 per dih

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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