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 ABC system, the percentage of the total overhead cost that is assigned to Product H44W is closest to:
A) 39.11%
B) 21.30%
C) 50.00%
D) 17.81%

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 ABC system, the percentage of the total overhead cost that is assigned to Product H44W is closest to:
A) 39.11% 
B) 21.30% 
C) 50.00% 
D) 17.81%

Quizplus · Accepted Answer

The Answer of 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 ABC system, the percentage of the total overhead cost that is assigned to Product H44W is closest to:
A) 39.11% 
B) 21.30% 
C) 50.00% 
D) 17.81%

Hails Corporation Manufactures Two Products: Product Q21F and Product H44W