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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 from both production departments allocated
to each unit of Product B if Blue Ridge Marketing Inc. uses a
multiple department rate system.
a. $214.40 per unit
b. $320.00 per unit
c. $115.20 per unit
d. $425.60 per unit
The company is looking for shifting from single plantwide overhead rate to multiple overhead rate system. | |||||
So we have to calculate overhead rate for each department separately | |||||
Painting Dept. | |||||
a | Overhead | $248,000 | |||
b | Direct labor hours | 10,000 hours | |||
Overhead Rate(a/b) | $24.80 | ||||
Finishing Dept. | |||||
c | Overhead | $72,000 | |||
d | Direct labor hours | 10,000 hours | |||
Overhead Rate(c/d) | $7.20 | ||||
Overhead Allocation for Product B | |||||
Labor Hours | Overhead Rate | Overhead | |||
Painting Dept. | 4 hours | $24.80 | $99.20 | ||
Finishing Dept. | 16 hours | $7.20 | $115.20 | ||
Total Overhead | $214.40 | ||||
So Option a $214.40 per unit is correct |
Calculator Blue Ridge Marketing Inc. manufactures two products, A and B. Presently, the company uses a...
1 - 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 LaborHours (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...
Calculator 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. А Direct Labor Product Overhead Hours dih) B $248,000 Painting Dept. 10,000 din 16 dih 4 dih Finishing Dept 72.000 10,000 4 16 Totals $320,000 20,000 dih 20...
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. $248,200 11,600 dlh 15 dlh 4 dlh Finishing Dept. 74,800 8,100 2 18 Totals $323,000 19,700 dlh 17 dlh...
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. $232,900 8,200 dlh 13 dlh 3 dlh Finishing Dept. 71,100 9,200 2 18 Totals $304,000 17,400 dlh 15 dlh...
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. Product A B 13 dih Direct Labor Hours (dlh) 8,800 dih 6,300 15,100 dlh Painting Dept. Finishing Dept. 7 dlh Overhead $267,300 77,900 $345,200 7 18 Totals 20 dih...
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. Product Direct Labor Hours (dih) Overhead A B 11,100 dih 15 dih 6 dlh Painting Dept. Finishing Dept. 5464,646 105,506 7,100 7 20 Totals $570,152 18,200 dih 22 dlh...
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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 Product Direct Labor Hours (dlh) 11,600 dlh Overhead $348,580 40,964 $389,544 Painting Dept 13 dh 3 dlh Finishing Dept 4,900 16 Totals 16,500 dlh 16 dlh 19...
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. Direct Product Overhead Labor Hours (dlh) A B Painting Dept $250,400 10,600 dlh 4 dlh 11 dlh Finishing Dept. 80,100 11,900 Totals $330,500 22,500 dlh 8 dlh 18 dih...
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. Product Direct Labor Hours (din) Overhead A B Painting Dept $243,700 11,300 dith 12 din 6 dih Finishing Dept 72,400 7,100 7 20 Total $316,100 18,400 din 19 d...
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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. DLH per Product Total Direct Labor Hours Overhead $247,100 Painting Dept. Finishing Dept. 84,700 10,600 10,900 21,500 Totals $331,800 Calculate the plantwide factory overhead rate for Adirondack Marketing Inc. a. $7.77 per dih b. $15.43 per dih c. $23.31 per dih...