Ramapo Company produces two products, Blinks and Dinks. They are manufactured in two departments, Fabrication and Assembly. Data

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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 1,000 4 5 Dinks 2,000 2 8 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.$37.45 b.$19.50 c.$78.00 d.$56.00

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2 answers:

Katen [2.9K] · Answer 1 · 2026-03-02T18:37:36+03:00

Answer:

The factory overhead allocated for each unit of Blinks is b.$19.50

Explanation:

It’s essential to recognize that Ramapo Company applies a single plantwide overhead rate to allocate all overhead costs based on direct labor hours.

The plantwide overhead rate is determined by dividing the Total Overheads of the company by the Total Labor Hours.

Total Overheads:

Fabrication Department $84,000

Assembly Department $72,000

Total $156,000

Total Labor Hours:

Fabrication Department 0

Assembly Department (1,000 × 4) + (2,000 × 2) 8,000

Total 8,000

Note: only the Assembly Department has labor hours.

Plantwide overhead rate:

Plantwide overhead rate = Total Overheads / Total Labor Hours

= $156,000 / 8,000

= $ 19.50

soldi70 [3.1K] · Answer 2 · 2026-03-02T18:34:03+03:00

Answer: $19.50

Explanation:

Regarding the data from Ramapo company;

RAMAPO COMPANY:

Product Unit Direct-labor-hours

Blink 1,000 4

Dink 2,000 2

Production occurs in two areas;

Fabrication (only machine hours)

Assembly department (only labor hours).

Per the question, THE COMPANY APPLIES A SINGLE PLANTWIDE OVERHEAD RATE TO ALLOCATE ALL FACTORY OVERHEAD BASED ON DIRECT LABOR HOURS.

PLANT-WIDE OVERHEAD =

Total factory overhead ÷ total factory direct labor hours

Total factory overhead:

Fabrication department overhead = $84,000

Assembly department overhead = $72,000

Total overhead = $156,000

Factory direct labor-hours:

Total Labor-hours = (unit × direct labor hour(Blink)) + unit × direct labor hour (Dink)

(1,000 × 4) + (2,000 × 2) = 8,000

Plantwide overhead = Total overhead / total direct labor hour

Cost for plantwide overhead per unit of Blink = $156,000 ÷ 8,000 = $19.50