Arrojo Corporation manufactures two products: Product X71B and Product C91I. 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 X71B and C91I. Using the plantwide overhead rate, how much manufacturing overhead cost would be allocated to Product X71B?

Question

Arrojo Corporation manufactures two products: Product X71B and Product C91I. 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 X71B and C91I.   Using the plantwide overhead rate, how much manufacturing overhead cost would be allocated to Product X71B?

Quizplus · Accepted Answer

The company's plantwide overhead rate is computed as follows: 11eacbfc_c65f_6962_8ffe_4713a3441626_TB7552_00 Using the plantwide overhead rate, the manufacturing overhead cost that would be allocated to Product X71B is computed as follows:
 11eacbfc_c65f_9073_8ffe_e735ef5f101d_TB7552_00

Arrojo Corporation Manufactures Two Products: Product X71B and Product C91I