23)

Meli Corporation manufactures two products: Product L61P and Product B60E. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products L61P and B60E.

Activity Cost Pool	Activity Measure	Total Cost		Total Activity
Machining	Machine-hours	$	280,000	14,000	MHs
Machine setups	Number of setups	$	225,000	450	setups
Product design	Number of products	$	84,000	2	products
Order size	Direct labor-hours	$	310,000	10,000	DLHs

Activity Measure	Product L61P	Product B60E
Machine-hours	6,000	8,000
Number of setups	290	160
Number of products	1	1
Direct labor-hours	7,000	3,000

Using the plantwide overhead rate, the percentage of the total overhead cost that is allocated to Product L61P is closest to:

rev: 03_17_2018_QC_CS-119201

Multiple Choice

• A) 70.00%

• B) 50.00%

• C) 10.34%

• D) 31.37%