Reference no: EM132687278

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.              $235,200      9,900dlh                           13dlh  3dlh

Finishing Dept.          73,600          7,300                                   6       15

Totals                       $308,800     17,200dlh                              19dlh  18dlh

Problem 1: Determine the overhead in the Painting Department for each unit of Product B if Blue Ridge Marketing Inc. uses a multiple department rate system.

a.$53.86 per unit
b.$30.25 per unit
c.$71.28 per unit
d.$23.76 per unit