Ben Corporation manufactures two products: Product E05G and Product L64Y. 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 E05G and L64Y. Using the plantwide overhead rate, the percentage of the total overhead cost that is allocated to Product E05G is closest to:

Question

Ben Corporation manufactures two products: Product E05G and Product L64Y. 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 E05G and L64Y.   Using the plantwide overhead rate, the percentage of the total overhead cost that is allocated to Product E05G is closest to:

Quizplus · Accepted Answer

The company's plantwide overhead rate is computed as follows: 11eacbfc_c65e_a60d_8ffe_17ca91ff81f4_TB7552_00 Using the plantwide overhead rate, the manufacturing overhead cost that would be allocated to Product E05G is computed as follows:
 11eacbfc_c65e_f42e_8ffe_b9cc1690027d_TB7552_00 Using the plantwide overhead rate, the percentage of the total overhead cost allocated to Product E05G is computed as follows:
 11eacbfc_c65e_f42f_8ffe_13ecdd4347e7_TB7552_00

Ben Corporation Manufactures Two Products: Product E05G and Product L64Y