Blue Ridge Marketing Inc. manufactures two products, A and B. Presently, the com

Question

Blue Ridge Marketing Inc. manufactures two products, A and B. Presently, the company uses a singl plantwide factory overhead rate for allocating overhead to products. Howev moving to a information about estimated overhead and direct labor hours er, management is considering multiple department rate system for allocating overhead. The following table presents Product Overhead $248.000 72,000 $320,000 Direct Labor Hours (dlh 10,000 dilh 10,000 20,000 dlh 4 dlh 16 20 dlh 16 dlh Painting Dept Finishing Dept Totals 20 dlh Determine the overhead from both production departments allocated to each unit of Product B if the compa uses a multiple department rate system ny a. S425.60 per unit b. $115.20 per unit c. $214.40 per unit d. S320.00 per unit Common allocation bases are a. direct labor dollars, direct labor hours, direct material dollars b. direct labor dollars, direct labor hours, machine hours c. direct labor dollars, direct labor hours, machine dollars d. machine dollars, direct labor dollars, machine hours Challenger Factory produces two similar products regular widgets and deluxe widgets. The total plant overhead budget is $675,000 with 300,000 estimated direct labor hours. It is further estimated that deluxe widget production will need 3 direct labor hours for each unit and regular widget production will require 2 direct labor hours for each unit Using the single plantwide factory overhead rate with an allocation base of direct labor hours, how much factory overhead will be allocated to the regular widget production if budgeted production for the period is 75,000 units and actual production for the period is 72,000 units? a. $168,750 b. S324,000 c. S162,000 d. S337,500

Explanation / Answer

Production Department cost allocated to each unit of product B is $ 214.4

Option C. is correct

Common allocation bases are direct labour dollars, direct labour hours & machine hours.

So, Option B. is correct

As per Chegg's policy I have completely answered first question

Product Overhead Allocation per Unit Overhead Cost Direct Labour Hours A B Labour Cost Per Hour A B Painting Dept. 248000 10000 16 4 $    24.80 $              396.80 $                 99.20 Finishing Dept. 72000 10000 4 16 $       7.20 $                 28.80 $              115.20 Total 320000 20000 20 20 $    32.00 $              425.60 $              214.40

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