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Torello Corporation manufactures two products: Product H95V and Product V93N. The company uses a plantwide overhead rate based on direct labor-hours. It is considering
Torello Corporation manufactures two products: Product H95V and Product V93N. 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 H95V and V93N. Activity Cost Pool Machining Machine setups Product design Order size Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Total Cost Total Activity $242,000 11,000 MHS $140,000 350 setups $ 70,000 2 products $270,000 10,000 DLHS Activity Measure Product Product H95V V93N Machine-hours 6,000 5,000 Number of setups 250 100 Number of products 1 1 Direct labor-hours 6,000 4,000 What is the company's plantwide overhead rate?
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