Aresco Corporation manufactures two products: Product G51B and Product E48X. 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 G51B and E48X.
Required:
a. Using the plantwide overhead rate, what percentage of the total overhead cost is allocated to Product G51B?
b. Using the plantwide overhead rate, what percentage of the total overhead cost is allocated to Product E48X?
c. Using the ABC system, what percentage of the total overhead cost is assigned to Product G51B?
d. Using the ABC system, what percentage of the total overhead cost is assigned to Product E48X?

Question

Aresco Corporation manufactures two products: Product G51B and Product E48X. 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 G51B and E48X.
   Required:
a. Using the plantwide overhead rate, what percentage of the total overhead cost is allocated to Product G51B?
b. Using the plantwide overhead rate, what percentage of the total overhead cost is allocated to Product E48X?
c. Using the ABC system, what percentage of the total overhead cost is assigned to Product G51B?
d. Using the ABC system, what percentage of the total overhead cost is assigned to Product E48X?

Quizplus · Accepted Answer

The Answer of Aresco Corporation manufactures two products: Product G51B and Product E48X. 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 G51B and E48X.
   Required:
a. Using the plantwide overhead rate, what percentage of the total overhead cost is allocated to Product G51B?
b. Using the plantwide overhead rate, what percentage of the total overhead cost is allocated to Product E48X?
c. Using the ABC system, what percentage of the total overhead cost is assigned to Product G51B?
d. Using the ABC system, what percentage of the total overhead cost is assigned to Product E48X?

Aresco Corporation Manufactures Two Products: Product G51B and Product E48X