Question

e for ek 5 Quiz Help Save& Exit (ABC) system that allocates and for Products E47F and DO2M. ation manufactures two products: Product E47F and Product DOZM. The company is considering implementing an activity-based costing its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole 2 Machine setups Produet desiqn Order size Machine-hours Number of setups Number of products Direct labor-hours $165,000 11,000 MHs $150,000250 setups s 70,000 $310,000 10,000 DLHS 2 products Product Product E47F DO2M 5,000 6,000 Number of setups Number of products Direct labor-hours 200 so 4,000 6,000 Using the ABC system, the percentage of the total overhead cost that is assigned to Product E47F is closest to 17.84% < Prev 60110 Next > MacBook Air

Answer 1

STATEMENT SHOWING ACTIVITY RATE OF ACTIVITY POOL
			Activity	Total	Expected	Activity
ACTIVITY COST POOL			Measures	Overheads	Activity	Rate
Machining			MH	165000	11000	15
Machine Setup			Setups	150,000	250	600
Product design			Products	70,000	2	35000
Order size			DLH	310,000	10,000	31
OH assigned t o Product E47F
machining (5000MH @15)			75000
Machine setup (200 Setups @600)			120000
Product design (1*35000)			35000
Order size (4000*31)			124000
OH applied to product E47F			354000
Divide: Total overheads			695000
	(165000+150000+70000+310000)
% of total OH cost			50.94%
Answer is 50.94%