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# Cost Allocation and Activity Based Costing for Stewart Marketing Inc.

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I am having trouble with these multiple choice questions.

4.

Stewart Marketing Inc. manufactures two products, A and B. Presently, the company uses a single plant-wide factory overhead rate for allocating overhead to products. However, management is considering moving to a multiple department rate system for allocating overhead. From the following information, using a single plant-wide rate, determine the overhead rate per unit of product A:
Product
Direct Labor
Painting Dept. \$248,000 10,000 dlh 16 dlh 4 dlh
Finishing Dept. 72,000 10,000 dlh 4 dlh 16 dlh
Totals \$320,000 20,000 dlh 20 dlh 20 dlh

a. \$320.00 per unit

b. \$496.00 per unit

c. \$144.00 per unit

d. \$640.00 per unit

8.
Stewart Marketing Inc. manufactures two products, A and B. Presently, the company uses a single plant-wide factory overhead rate for allocating overhead to products. However, management is considering moving to a multiple department rate system for allocating overhead. From the following information, determine the overhead rate in the Painting department for each unit of Product B if the company uses a multiple department rate system:
Product
Direct Labor
Painting Dept. \$248,000 10,000 dlh 16 dlh 4 dlh
Finishing Dept. 72,000 10,000 dlh 4 dlh 16 dlh
Totals \$320,000 20,000 dlh 20 dlh 20 dlh

a. \$12.40 per dlh

b. \$24.80 per dlh

c. \$7.20 per dlh

d. \$3.60 per dlh

9. Stewart Marketing Inc. manufactures two products, A and B. Presently, the company uses a single plant-wide factory overhead rate for allocating overhead to products. However, management is considering moving to a multiple department rate system for allocating overhead. From the following information, determine the overhead from both production departments allocated to each unit of Product A if the company uses a multiple department rate system.
Product
Direct Labor
Painting Dept. \$248,000 10,000 dlh 16 dlh 4 dlh
Finishing Dept. 72,000 10,000 dlh 4 dlh 16 dlh
Totals \$320,000 20,000 dlh 20 dlh 20 dlh

a. \$396.80 per unit

b. \$425.60 per unit

c. \$320.00 per unit

d. \$214.40 per unit
************************************************************************ 10.
. Stewart Marketing Inc. manufactures two products, A and B. Presently, the company uses a single plant-wide factory overhead rate for allocating overhead to products. However, management is considering moving to a multiple department rate system for allocating overhead. From the following information, determine the overhead from both production departments allocated to each unit of Product B if the company uses a multiple department rate system
Product
Direct Labor
Painting Dept. \$248,000 10,000 dlh 16 dlh 4 dlh
Finishing Dept. 72,000 10,000 dlh 4 dlh 16 dlh
Totals \$320,000 20,000 dlh 20 dlh 20 dlh

a. \$425.60 per unit

b. \$99.20 per unit

c. \$214.40 per unit

d. \$320.00 per unit

#### Solution Preview

4.Stewart Marketing Inc. manufactures two products, A and B. Presently, the company uses a single plant-wide factory overhead rate for allocating overhead to products. However, management is considering moving to a multiple department rate system for allocating overhead. From the following information, using a single plant-wide rate, determine the overhead rate per unit of product A: Product
Direct Labor
Painting Dept. \$248,000 10,000 dlh 16 dlh 4 dlh
Finishing Dept. 72,000 10,000 dlh 4 dlh 16 dlh
Totals \$320,000 20,000 dlh 20 dlh 20 dlh

a. \$320.00 per unit
b. \$496.00 per unit
c. \$144.00 per unit
d. \$640.00 per unit
In this case the management is using a single plant wide rate, this rate can be found out by taking the overhead of the painting dept 248,000 and dividing it by DL hours that is 10,000 that gives us 24.8 add to this the finishing dept overhead that is 72,000 divided by 10,000 that gives you 7.2 and this gives you a total of 32.0 since there is a single plant wide rate we take the total number of hours used by A that is 20 we multiply and get 640.00 that is number d.
8.
Stewart Marketing ...

#### Solution Summary

The solution provides detailed explanations for the answers as well as the calculations needed to arrive at the answer.

\$2.19