Losser Corporation manufactures two products: Product L73Z and Product A79B. 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 L73Z and A79B.
Required:
a. Using the plantwide overhead rate, how much manufacturing overhead cost would be allocated to Product L73Z?
b. Using the plantwide overhead rate, how much manufacturing overhead cost would be allocated to Product A79B?
c. Using the ABC system, how much total manufacturing overhead cost would be assigned to Product A79B?
d. Using the plantwide overhead rate, what percentage of the total overhead cost is allocated to Product L73Z?

Question

Losser Corporation manufactures two products: Product L73Z and Product A79B. 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 L73Z and A79B.
   Required:
a. Using the plantwide overhead rate, how much manufacturing overhead cost would be allocated to Product L73Z?
b. Using the plantwide overhead rate, how much manufacturing overhead cost would be allocated to Product A79B?
c. Using the ABC system, how much total manufacturing overhead cost would be assigned to Product A79B?
d. Using the plantwide overhead rate, what percentage of the total overhead cost is allocated to Product L73Z?

Quizplus · Accepted Answer

The Answer of Losser Corporation manufactures two products: Product L73Z and Product A79B. 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 L73Z and A79B.
   Required:
a. Using the plantwide overhead rate, how much manufacturing overhead cost would be allocated to Product L73Z?
b. Using the plantwide overhead rate, how much manufacturing overhead cost would be allocated to Product A79B?
c. Using the ABC system, how much total manufacturing overhead cost would be assigned to Product A79B?
d. Using the plantwide overhead rate, what percentage of the total overhead cost is allocated to Product L73Z?

Losser Corporation Manufactures Two Products: Product L73Z and Product A79B