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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 Q21F and H44W.

Activity Cost Pool Activity Measure Total Cost Total Activity
Machining Machine-hours $ 195,000 13,000 MHs
Machine setups Number of setups $ 90,000 150 setups
Product design Number of products $ 64,000 2 products
Order size Direct labor-hours $ 280,000 10,000 DLHs

Activity Measure Product Q21F Product H44W
Machine-hours 9,000 4,000
Number of setups 80 70
Number of products 1 1
Direct labor-hours 6,000 4,000

Using the ABC system, the percentage of the total overhead cost that is assigned to Product Q21F is closest to:

rev: 03_17_2018_QC_CS-119201

Garrison 16e Rechecks 2018-07-24

Multiple Choice

  • 34.18%

  • 60.89%

  • 50.00%

  • 26.71%

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