Reference no: EM132585991

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.             $433,664            12,800dlh           12dlh           6dlh

Finishing Dept.               78,696                7,200                  4              17

Totals                             $512,360            20,000dlh          16dlh        23dlh

Question 1: The overhead from both production departments allocated to each unit of Product B if Blue Ridge Marketing Inc. uses the multiple production department factory overhead rate method is

a. $10.93 per unit

b. $450.28 per unit

c. $389.09 per unit

d. $33.88 per unit