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Determine the overhead in the painting department

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Question - Blue Ridge Marketing Inc. manufactures two products, A and B. Presently, the company uses a single plant-wide 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 9,900 dlh 13 dlh3 dlh

Finishing Dept. 73,600 7,300 6 15

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

Required - 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

Reference no: EM132751019

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