Question
Hails Corporation manufactures two products: Product Q21F and Product H44W. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing
Hails Corporation manufactures two products: Product Q21F and Product H44W. 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 021F and H44W Activity Con Pool Machining Machine setup Product design Order size Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Total Cost $ 195,000 $ 90,000 $ 64,000 Todd Advis 13,000 MH 150 5 280,000 10,000 DL 2 produc Activity Mer Machine-bours Number of setups Number of product Dinst labor-b Product Q21F 9,000 NO 4,000 70 1 6,000 4,000 Using the ABC system, the percentage of the total overhead cost that is assigned to Product H44W in closest to 39.11% 21.30% 50.00% 17.81%
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