Vito Corporation manufactures two products: Product F77I and Product I48D. 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 F77I and I48D.
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 F77I?
c. Using the plantwide overhead rate, what percentage of the total overhead cost is allocated to Product I48D?

Question

Vito Corporation manufactures two products: Product F77I and Product I48D. 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 F77I and I48D.
   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 F77I?
c. Using the plantwide overhead rate, what percentage of the total overhead cost is allocated to Product I48D?

Quizplus · Accepted Answer

The Answer of Vito Corporation manufactures two products: Product F77I and Product I48D. 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 F77I and I48D.
   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 F77I?
c. Using the plantwide overhead rate, what percentage of the total overhead cost is allocated to Product I48D?

Vito Corporation Manufactures Two Products: Product F77I and Product I48D