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Assume a company that uses activity-based costing (ABC) has only two products A and B. The company does not have any organization-sustaining activities or

Assume a company that uses activity-based costing (ABC) has only two products – A and B. The company does not have any organization-sustaining activities or unused capacity costs. The company’s total manufacturing overhead cost of $56,000 has been allocated to the three activities shown below:

SetupsMachiningPacking Orders
Activity measure quantity: Product A201,000150
Activity measure quantity: Product B20?350
Overhead cost per activity cost pool??$10,000
Activity rate$150per setup$8per MH?

If the company decided to use a plantwide overhead rate with machine hours as the allocation base, what would be its plantwide overhead rate?

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