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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.
Painting Dept. overhead $248,000 direct labor hours 10,000dlh (A) 16dlh (B) 4dlh
Finishing Dept. overhead 72,000 direct labor hours 10,000 (A)4 1 (B) 6
Totals Overhead $320,000 Direct labor hours 20,000dlh (A) 20dlh (B) 20dlh
Problem 1: The overhead from both production departments allocated to each unit of Product B if Blue Ridge Marketing Inc. uses the multiple production department factory overhead rate method is
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