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.
|
$248,000
|
10,000 dlh
|
16 dlh
|
4 dlh
|
|
Finishing Dept.
|
72,000
|
10,000
|
4
|
16
|
|
Totals
|
$320,000
|
20,000 dlh
|
20 dlh
|
20 dlh
|
Determine the overhead rate in the Painting Department for each unit of Product B if Blue Ridge Marketing Inc. uses a multiple department rate system.
|
|
$49.60 per unit
|
|
|
$99.20 per unit
|
|
|
$28.80 per unit
|
|
|
$64.00 per unit
|