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Determine the overhead in the finishing department

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Question - 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 $320,00020,000 dlh 20 dlh 20 dlh

Determine the overhead in the Finishing Department for each unit of Product A if Blue Ridge Marketing Inc. uses a multiple department rate system.

a. $99.20 per unit

b. $28.80 per unit

c. $64.00 per unit

d. $49.60 per unit

Reference no: EM132820378

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