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.
-Using a single plantwide rate, the factory overhead allocated per unit of Product B is

Question

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.​  ​
-Using a single plantwide rate, the factory overhead allocated per unit of Product B is

Quizplus · Accepted Answer

The plantwide overhead rate is calculated by dividing total overhead costs by total machine hours. Then, multiply this rate by the machine hours required for Product B to find the overhead allocated per unit.