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. OverheadDirectLabor Hours (dlh)Product A B Painting Dept.$259,500 8,500dlh 12dlh7dlhFinishing Dept.73,600 8,600 7 16 Totals$333,100 17,100dlh 19dlh23dlhThe 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 isa.$213.71 per unitb.$136.36 per unitc.$59.91 per unitd.$30.53 per unit

The factory overhead allocated rate is used to allocate the overhead expenses.

Answered: Blue Ridge Marketing Inc. manufactures…

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter18: Activity-based Costing

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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.

	Overhead	Direct Labor Hours (dlh)	Product
A	B
Painting Dept.	$259,500		8,500	dlh	12	dlh	7	dlh
Finishing Dept.	73,600		8,600		7		16
Totals	$333,100		17,100	dlh	19	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.$213.71 per unit

b.$136.36 per unit

c.$59.91 per unit

d.$30.53 per unit

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