Blue Ridge Marketing Inc

Multiple Choice

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. Determine the overhead rate in the Finishing Department for each unit of Product A if the company uses a multiple department rate system.

A) $24.80 per dlh
B) $12.40 per dlh
C) $16.00 per dlh
D) $7.20 per dlh