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. Product Direct Overhead Labor Hours (dlh) A $250,700 11,200 dlh 5 dlh 8 dlh Painting Dept. Finishing Dept. 73,200 10,500 3 $323,900 21,700 dlh 8 dlh 16 dlh Totals Using a single plantwide rate, the factory overhead allocated per unit of Product B is Oa. $238.88 Ob. $119.44 Oc. $111.92 Od. $14.93
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. Product Direct Overhead Labor Hours (dlh) A $250,700 11,200 dlh 5 dlh 8 dlh Painting Dept. Finishing Dept. 73,200 10,500 3 $323,900 21,700 dlh 8 dlh 16 dlh Totals Using a single plantwide rate, the factory overhead allocated per unit of Product B is Oa. $238.88 Ob. $119.44 Oc. $111.92 Od. $14.93
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 14E
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