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Bippus Corporation manufactures two products: Product XO8R and Product P56L. The company uses a plantwide overhead rate based on direct labor-hours. It is considering Implementing
Bippus Corporation manufactures two products: Product XO8R and Product P56L. 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 X08R and P56L. 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 $ 247,000 $ 60,000 $ 56,000 $ 260,000 Total Activity 13,000 MHS 150 setups 2 products 10,000 DLHs Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Product Product XO8R P56L 10,000 3,000 110 40 1 1 6,000 4,000 Using the plantwide overhead rate, how much manufacturing overhead cost would be allocated to Product P56L
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