Bippus Corporation manufactures two products: Product X08R and Product P56L. 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 X08R and P56L. Using the plantwide overhead rate, how much manufacturing overhead cost would be allocated to Product P56L?

Question

Bippus Corporation manufactures two products: Product X08R and Product P56L. 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 X08R and P56L.   Using the plantwide overhead rate, how much manufacturing overhead cost would be allocated to Product P56L?

Quizplus · Accepted Answer

The company's plantwide overhead rate is computed as follows: 11eacbfc_c65d_4674_8ffe_8318e97043d0_TB7552_00 Using the plantwide overhead rate, the manufacturing overhead cost that would be allocated to Product P56L is computed as follows:
 11eacbfc_c65d_6d85_8ffe_636757a577a6_TB7552_00

Bippus Corporation Manufactures Two Products: Product X08R and Product P56L