Lenoir Company manufactures two products28,000 units of Product D and 12,000 units of Product R. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products D and R:

Activity Cost Pool Activity Measure Estimated

Overhead Cost Expected Activity

Machining. . . . . . . . . . . . . Machine-hours $400,000 20,000 MHs

Machine setups . . . . . . . . . . Number of setups $200,000 400 setups

Product design . . . . . . . . . . Number of products $168,000 2 products

General factory. . . . . . . . . . Direct labor-hours $600,000 24,000 DLHs

Activity Measure Product D Product R

Machine-hours. . . . . . . . . . . . . . . 14,000 6,000

Number of setups . . . . . . . . . . . . . 100 300

Number of products . . . . . . . . . . . . 1 1

Direct labor-hours . . . . . . . . . . . . 16,000 8,000

Required:

What is the companys plantwide overhead rate?

Using the plantwide overhead rate, how much manufacturing overhead cost is allocated to Product D? How much is allocated to Product R?

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