Ramapo Company produces two products, Blinks and Dinks. They are manufactured in two departments, Fabrication and Assembly. Data for the products and departments are listed below. All of the machine hours take place in the Fabrication Department, which has an estimated overhead of $84,000. All of the labor hours take place in the Assembly Department, which has an estimated total overhead of $72,000.
-Ramapo Company uses a single plantwide overhead rate to apply all factory overhead costs based on direct labor hours. The factory overhead allocated per unit of Blinks is
A)$78.00
B)$19.50
C)$37.45
D)$56.00

Question

Ramapo Company produces two products, Blinks and Dinks. They are manufactured in two departments, Fabrication and Assembly. Data for the products and departments are listed below.  All of the machine hours take place in the Fabrication Department, which has an estimated overhead of $84,000. All of the labor hours take place in the Assembly Department, which has an estimated total overhead of $72,000.​
-Ramapo Company uses a single plantwide overhead rate to apply all factory overhead costs based on direct labor hours. The factory overhead allocated per unit of Blinks is
A)$78.00 
B)$19.50 
C)$37.45 
D)$56.00

Quizplus · Accepted Answer

The factory overhead allocated per unit of Blinks is $78.00. This is calculated by dividing the total factory overhead costs by the total direct labor hours, and then multiplying the result by the direct labor hours required to produce one unit of Blinks.

Ramapo Company Produces Two Products, Blinks and Dinks