Question
Immen Corporation manufactures two products: Product B82O and Product P99Y. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing
Immen Corporation manufactures two products: Product B82O and Product P99Y. 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 B82O and P99Y. Activity Cost Pool Activity Measure Total Cost Total Activity Machining Machine-hours $ 330,000 15,000 MHs Machine setups Number of setups $ 300,000 500 setups Product design Number of products $ 46,000 2 products General factory Direct labor-hours $ 330,000 10,000 DLHs Activity Measure Product B82O Product P99Y Machine-hours 7,000 8,000 Number of setups 200 300 Number of products 1 1 Direct labor-hours 3,000 7,000 Using the plantwide overhead rate, how much manufacturing overhead cost would be allocated to Product P56L? Using the ABC system, how much total manufacturing overhead cost would be assigned to Product B82O? Multiple Choice $99,000 $396,000 $297,000 $503,000
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started