Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Leader Corporation manufactures two products: Product Alfa and Product Beta. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing
Leader Corporation manufactures two products: Product Alfa and Product Beta. 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 Alfa and Beta. Activity Cost Pool Activity Measure Total Cost Total Activity Machining Machine-hours IS 207,000 9,000MHS Machine setups Number of setups s 140,000 350setups Product design Number of products 98.000 2products Order size Direct labor-hours 340,000 10,000 DLHS 1 Activity Measure Product Alfa Product Beta Machine-hours 6,000 3,000 Number of setups 190 160 Number of products Direct labor-hours 4,000 6,000 Required: 1. Compute the plantwide (POHR) overhead rate. 2. Using the plantwide overhead rate, how much manufacturing overhead cost would be allocated to Product Alfa? How much manufacturing overhead cost would be allocated to Product Beta? 3. Using the ABC system, compute the activity rate for each activity cost pool. 4. Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Alfa? How much manufacturing overhead cost would be allocated to Product Beta
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