Determine the overhead rate per unit for product b

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Problem

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.

$256,274

dlh

9,321



7

dlh

10

dlh

Finishing Dept.

62,942


11,091



6


6


    Totals

$319,216

dlh

20,412



13

dlh

16

dlh

From the following information, using a single plantwide rate, determine the overhead rate per unit for Product B. Round to the nearest cent in the final calculation.

Reference no: EM131783891

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