Question
Greene Company manufactures two products: Boots and Pants. The company uses a pre-determined overhead rate based on direct labor-hours. It is considering implementing an activity-based
Greene Company manufactures two products: Boots and Pants. The company uses a pre-determined 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 Boots and Pants. Activity Cost Pool Activity Measure Total Cost Total Activity Machining Machine-hours $ 247,000 13,000 MHs Machine setups Number of setups $ 60,000 150 setups Product design Number of products $ 56,000 2 products Order size Direct labor-hours $ 260,000 10,000 DLHs Activity Measure Product Boots Product Pants Machine-hours 10,000 3,000 Number of setups 110 40 Number of products 1 1 Direct labor-hours 6,000 4,000 Using the pre-determined overhead rate, how much manufacturing overhead cost would be allocated to Product Pants?
Multiple Choice $249,200 $311,500 $418,000 $373,800
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