Daher Corporation manufactures two products: Product A34R and Product E05V. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products A34R and E05V.
Required:
a. What is the company's plantwide overhead rate?
b. Using the plantwide overhead rate, how much manufacturing overhead cost would be allocated to Product E05V?
c. Using the plantwide overhead rate, what percentage of the total overhead cost is allocated to Product A34R?

Question

Daher Corporation manufactures two products: Product A34R and Product E05V. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products A34R and E05V.
   Required:
a. What is the company's plantwide overhead rate?
b. Using the plantwide overhead rate, how much manufacturing overhead cost would be allocated to Product E05V?
c. Using the plantwide overhead rate, what percentage of the total overhead cost is allocated to Product A34R?

Quizplus · Accepted Answer

The Answer of Daher Corporation manufactures two products: Product A34R and Product E05V. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products A34R and E05V.
   Required:
a. What is the company's plantwide overhead rate?
b. Using the plantwide overhead rate, how much manufacturing overhead cost would be allocated to Product E05V?
c. Using the plantwide overhead rate, what percentage of the total overhead cost is allocated to Product A34R?

Daher Corporation Manufactures Two Products: Product A34R and Product E05V