Question
Ben Corporation manufactures two products: Product E05G and Product L64Y. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing
Ben Corporation manufactures two products: Product E05G and Product L64Y. 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 E05G and L64Y.
| Activity Cost Pool | Activity Measure | Total Cost | Total Activity | ||
| Machining | Machine-hours | $ | 285,000 | 15,000 | MHs |
| Machine setups | Number of setups | $ | 180,000 | 300 | setups |
| Product design | Number of products | $ | 64,000 | 2 | products |
| Order size | Direct labor-hours | $ | 350,000 | 10,000 | DLHs |
| Activity Measure | Product E05G | Product L64Y |
| Machine-hours | 12,000 | 3,000 |
| Number of setups | 170 | 130 |
| Number of products | 1 | 1 |
| Direct labor-hours | 3,000 | 7,000 |
Using the plantwide overhead rate, the percentage of the total overhead cost that is allocated to Product E05G is closest to:
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Anti Money Laundering Audit And Controls Practical Hands On Guide For Audit And Compliance Professionals
Authors: Bob Walsh
1st Edition
1518662803, 978-1518662805
