Question

homeworklib Adirondak 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. $251,800 11,700 6 10 Finishing Dept. 72,800 10,000 2 5 Totals $324,600 21,700 8 15 Calculate the overhead rate per unit for Product A in the Painting Department of Adirondack Marketing Inc.

Answer 1

Answer:

$89.76

Explanation:

Calculation to determine the overhead rate per unit for Product A in the Painting Department of Adirondack Marketing Inc.

First step is to calculate Single overhead rate per hour using this formula

Single overhead rate per hour = Total overheads/ Total labor hour

Let plug in the formula

Single overhead rate per hour = 324600/21700 Single overhead rate per hour = 14.96per labor hour

Now let determine the Overhead rate per unit of product A in the painting department

Overhead rate per unit of product A in the painting department = 6 hours × $14.96per hour

Overhead rate = $89.76 per unit

Therefore, the overhead rate per unit for Product A in the Painting Department of Adirondack Marketing Inc is $89.76 per unit