Question
Weissman Corporation manufactures two products: Product E16S and Product P17K. The company is considering implementing an activity-based costing (ABC) system that allocates its manufacturing overhead
Weissman Corporation manufactures two products: Product E16S and Product P17K. The company 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 E16S and P17K.
| Activity Cost Pool | Activity Measure | Total Cost | Total Activity | |
|---|---|---|---|---|
| Machining | Machine-hours | $ 220,000 | 11,000 | MHs |
| Machine setups | Number of setups | $ 240,000 | 400 | setups |
| Product design | Number of products | $ 74,000 | 2 | products |
| Order size | Direct labor-hours | $ 270,000 | 10,000 | DLHs |
| Activity Measure | Product E16S | Product P17K |
|---|---|---|
| Machine-hours | 7,000 | 4,000 |
| Number of setups | 270 | 130 |
| Number of products | 1 | 1 |
| Direct labor-hours | 3,000 | 7,000 |
Using the ABC system, the percentage of the total overhead cost that is assigned to Product E16S is closest to:
Multiple Choice
52.24%
42.16%
10.07%
50.00%
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Financial Accounting An Introduction
Authors: Alex Watson, Jacqui Kew
5th Edition
0190425520, 978-0190425524
