Adirondak 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.
|
|
Overhead
|
Total Direct
Labor Hours
|
DLH per Product
|
|
A
|
B
|
|
Painting Dept.
|
$250,000
|
10,000
|
16
|
4
|
|
Finishing Dept.
|
75,000
|
12,000
|
4
|
16
|
|
Totals
|
$325,000
|
22,000
|
20
|
20
|
Calculate the overhead rate per unit for Product A in the painting department of Adirondack Marketing Inc.
a. $325.00 per unit
b. $147.70 per unit
c. $236.32 per unit
d. $161.00 per unit