C) Stock prices will fluctuate only in response to unexpected news.
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
