Blue Ridge Marketing Inc. manufactures two products, A and B. Presenty,the compa

Question

Blue Ridge Marketing Inc. manufactures two products, A and B. Presenty,the company uses a single plantwide factory overthead rate allocating overhead to products. However, management is considering moving to a m following table presents information about estimated overhead and direct labor hours ultiple department rate system for allocating overhead. The Direct Product overhead Labor Hours (dih) A Painting Dept. $263,200 77,000 $340,200 11,100 dih 15 dih 4 dlh 7 20 22 dlh 24 dlh Finishing Dept. 8,000 Totals 19,100 dlh Determine the overhead in the Painting Department for each unit of Product B if Blue Ridge Marketing Inc. uses a multiple department rate system. oa, $23.71 per unit Ob. $71.25 per unit C. $38.50 per unit Od. $94.84 per unit 29

Explanation / Answer

Answer is d. 94.84 per unit Explanation: OH rate per DLH in Painting deptt: Estimated Overheads of painting deptt 263200 Divide: DLH of Painting deptt 11100 OH rate per DLH in Painting deptt: 23.71 per hour DLH required in Product B for painting 4 hours OH cost of Painting Depp per unit of B 94.84

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