Adirondak Marketing Inc. manufactures two products, A and B. Presently, the comp

Question

Adirondak 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.

Calculate the plantwide factory overhead rate for Adirondack Marketing Inc.

a.$2.20 per dlh

b.$14.48 per dlh

c.$5.60 per dlh

d.$24.38 per dlh

Overhead Total
Direct
Labor Hours DLH per Product A B Painting Dept. $253,600 10,400 5 7 Finishing Dept. 65,000 11,600 5 5     Totals $318,600 22,000 10 12

Explanation / Answer

Plantwide factory overhead rate for Adirondack Marketing Inc

= 318600 / 22000

= 14.48 Per dlh

Answer = B) $14.48 per dlh

Overhead Total
Direct
Labor Hours DLH per Product A B Painting Dept. $253,600 10,400 5 7 Finishing Dept. 65,000 11,600 5 5     Totals $318,600 22,000 10 12

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