Problem
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.
|
|
Overhead
|
Direct
Labor Hours (dlh)
|
Product
|
|
A
|
B
|
|
Painting Dept.
|
$256,274
|
dlh
|
9,321
|
|
|
7
|
dlh
|
10
|
dlh
|
|
Finishing Dept.
|
62,942
|
|
11,091
|
|
|
6
|
|
6
|
|
|
Totals
|
$319,216
|
dlh
|
20,412
|
|
|
13
|
dlh
|
16
|
dlh
|
From the following information, using a single plantwide rate, determine the overhead rate per unit for Product B. Round to the nearest cent in the final calculation.