Question
46) Arrojo Corporation manufactures two products: Product X71B and Product C911. The company uses a plantwide overhead rate based on direct labor-hours. It is considering
46) Arrojo Corporation manufactures two products: Product X71B and Product C911. 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 X71B and C911. Activity Cost Pool Activity Measure Machine-hours Number of setups Number of products Total Cost Total Activity $ 275,000 11,000 MHs $ 210,000 $ 48,000 350 setups 2 products $ 300,000 10,000 DLHS Machining Machine setups Product design General factory Direct labor-hours Activity Measure Machine-hours Number of setups Product X71B Product C911 5,000 220 6,000 130 Number of products Direct labor-hours 1 1 6,000 4,000 Using the plantwide overhead rate, how much manufacturing overhead cost would be allocated to Product X71B? A) $416,500 B) $499,800 C) $333,200 D) $372,000
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