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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 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 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 Oa. $415.73 per unit Ob. $30.05 per unit Oc. $223.91 per unit Od. $8.36 per unit
2)
Blackwelder Factory produces two similar products-small lamps and desk lamps. The total plant overhead budget is $574,000 with 477,000 estimated direct labor hours. It is further estimated that small lamp production will require 252,000 direct labor hours and desk lamp production will need 225,000 direct labor hours. Using the single plantwide factory overhead rate with an allocation base of direct labor hours, how much factory overhead will Blackwelder Factory allocate to small lamp production if actual direct hours for the period is 243,000? Oa. $291,600 Ob. $619,920 Oc . $595,259 Od. $642,880
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