Hails Corporation manufactures two products: Product Q21F and Product H44W. 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 Q21F and H44W. Using the plantwide overhead rate, the percentage of the total overhead cost that is allocated to Product Q21F is closest to:

Question

Hails Corporation manufactures two products: Product Q21F and Product H44W. 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 Q21F and H44W.   Using the plantwide overhead rate, the percentage of the total overhead cost that is allocated to Product Q21F is closest to:

Quizplus · Accepted Answer

The company's plantwide overhead rate is computed as follows: 11eacbfc_c671_6a61_8ffe_875f561b1073_TB7552_00 Using the plantwide overhead rate, the manufacturing overhead cost that would be allocated to Product Q21F is computed as follows:
 11eacbfc_c671_9172_8ffe_33b7fbbd68b7_TB7552_00 Using the plantwide overhead rate, the percentage of the total overhead cost allocated to Product Q21F is computed as follows:
 11eacbfc_c671_9173_8ffe_21b3be47e292_TB7552_00

Hails Corporation Manufactures Two Products: Product Q21F and Product H44W