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.

Product	Number of Units	Direct Labor Hours Per Unit	Machine Hours Per Unit
Blinks	1,005	3	6
Dinks	2,245	2	7

All of the machine hours take place in the Fabrication department, which has an estimated overhead of $94,100. All of the labor hours take place in the Assembly department, which has an estimated total overhead of $97,500.

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. $76.59

b. $51.06

c. $292.54

d. $12.73

Answer 1

• Correct Answer = Option ‘A’ $ 76.59
• Workings

		Blinks	Dinks	Total
A	No of units	1005	2245
B	DLHs per unit	3	2
C = A x B	Total Hours	3015	4490	7505

A	Fabrication department overhead	$94,100
B	Assembly department overhead	$97,500
C = A+B	Total Overheads cost	$191,600
D	Total hours	7505
E = C/D	Single plantwide overhead rate	$25.53
F	No of DLHs per unit of Blinks	3
G = E x F	Factory pverhead allocated per unit of Blink	$76.59