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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. $248,000 10,000 dlh 16 dlh 4 dlh Finishing Dept. 72,000 10,000 4 16 Totals $320,000 20,000 dlh 20 dlh 20 dlh The overhead from both production departments allocated to each unit of Product A if Blue Ridge Marketing Inc. uses the multiple production department factory overhead rate method is a.$396.80 per unit b.$214.40 per unit c.$320.00 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. $248,000 10,000 dlh 16 dlh 4 dlh Finishing Dept. 72,000 10,000 4 16 Totals $320,000 20,000 dlh 20 dlh 20 dlh The overhead from both production departments allocated to each unit of Product A if Blue Ridge Marketing Inc. uses the multiple production department factory overhead rate method is a.$396.80 per unit b.$214.40 per unit c.$320.00 per unit

Managerial Accounting
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 3PA: Activity-based and department rate product costing and product cost distortions Black and Blue...
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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. $248,000   10,000 dlh   16 dlh 4 dlh
    Finishing Dept. 72,000   10,000     4   16  
        Totals $320,000   20,000 dlh   20 dlh 20 dlh

    The overhead from both production departments allocated to each unit of Product A if Blue Ridge Marketing Inc. uses the multiple production department factory overhead rate method is

    a.$396.80 per unit
    b.$214.40 per unit
    c.$320.00 per unit
    d.$425.60 per unit
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