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.
Overhead Total
Direct
Labor Hours DLH per Product
A B
Painting Dept. $250,000 10,000 16 4
Finishing Dept. 72,000 12,000 4 16
Totals $322,000 22,000 20 20
Calculate the overhead rate per unit for Product A:
a. $ 146.40 per unit
b. $ $161.00 per unit
c. $292.80 per unit
d. $322.00 per unit
Calculate the plantwide factory overhead rate:
a $8.05 per dlh
b. 25.00 per dlh
c. $14.64 per dlh
d. $32.20 per dlh