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Blue Ridge Marketing Inc

Accounting

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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.

OverheadDirect

Labor Hours (dlh)Product A  B Painting Dept.$428,583 10,300dlh 16dlh3dlhFinishing Dept.68,229 5,700  6 20     Totals$496,812 16,000dlh 22dlh23dlh

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.$41.61 per unit

b.$737.58 per unit

c.$364.23 per unit

d.$11.97 per unit