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.
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.
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 1PB: Single plantwide factory overhead rate Spotted Cow Dairy Company manufactures three productswhole...
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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.
OverheadDirect
Labor Hours (dlh)Product A B Painting Dept. $249,100 9,400 dlh 7 dlh 11 dlh Finishing Dept. 69,400 10,900 2 8 Totals $318,500 20,300 dlh 9 dlh 19 dlh Using a single plantwide rate, the factory overhead allocated per unit of Product B is
a.$141.21b.$298.11c.$185.50d.$15.69
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