Determine the overhead from both production departments

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Question - Blue Ridge Marketing Inc. manufacturing two products, A and B. Presently, the company uses a single plant-wide 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.

$606,900

15,000 dlh

13 dlh

3 dlh

Finishing Dept.

71,442

8,100

5

16

Totals

$678,342

23,100 dlh

18 dlh

19 dlh

Determine the overhead from both production departments allocated to each unit of Products B if Blue Ridge Marketing Inc. uses a multiple department rate system.

a. $8.82 per unit

b. $570.08 per unit

c. $40.46 per unit

d. $262.50 per unit

Reference no: EM131725705

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