Single plantwide factory overhead

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Reference no: EM13965126

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
	Overhead	Direct Labor Hours (dlh)	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

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

		$49.60 per unit
		$99.20 per unit
		$28.80 per unit
		$64.00 per unit

Reference no: EM13965126

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