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Assignment (2): CH 7: ABC Leader Corporation manufactures two products: Product 095C and Product M3IN. The company uses a plantwide overhead rate based on direct
Assignment (2): CH 7: ABC Leader Corporation manufactures two products: Product 095C and Product M3IN. 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 095C and M31N. Activity Cost Pool Machining Machine setups Product design Order size Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Total Cost $ 207,000 $ 140,000 $ 98,000 $ 340,000 Total Activity 9,000 MHS 350 setups 2 products 10,000 DLHS Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Product 0950 6,000 190 Product M31N 3,000 160 4,000 6,000 Required: 1. Compute the plantwide (POHR) overhead rate. 2. Using the plantwide overhead rate, how much manufacturing overhead cost would be allocated to Product 095C? 3. Using the ABC system, compute the activity rate for each activity cost pool. 4. Using the ABC system, how much total manufacturing overhead cost would be assigned to Product 095C
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