17 April, 12:17

Adirondack 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. Overhead Total Direct Labor Hours DLH per Product A B Painting Dept. \$255,200 10,100 3 11 Finishing Dept. 65,700 11,200 6 7 Totals \$320,900 21,300 9 18 Using a single plantwide rate, the factory overhead allocated per unit of Product A in the Painting Department is a.\$15.07 per unit b.\$75.80 per unit c.\$45.21 per unit d.\$682.22 per unit

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1. 17 April, 14:11
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a.\$15.07 per unit

Explanation:

Using a single plantwide overhead rate based on direct labor hours each product is assigned \$15.07 of overhead per unit.

Plantwide overhead rate = Total Budgeted Overhead / Total Budgeted Direct Labor Hours

Plantwide overhead rate = \$320,900 / 21,300 = \$ 15.065 = \$ 15.07

Overhead Total Direct Labor Hours DLH per Product A B

Painting Dept. \$255,200 10,100 3 11

Finishing Dept. 65,700 11,200 6 7

Totals \$320,900 21,300 9 1