Using the plantwide overhead rate, how much manufacturing overhead cost would be allocated to Product P99Y? O $503,000 O $704,200 O $396,000 O $301,800
Using the plantwide overhead rate, how much manufacturing overhead cost would be allocated to Product P99Y? O $503,000 O $704,200 O $396,000 O $301,800
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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![Howard Corporation manufactures two products: Product B820 and Product
P99Y. 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 B820 and
P99Y.
Activity Cost Pool Activity Measure
Machining
Machine setups
Product design
Order size
Activity Measure
Machine-hours
Number of setups
Number of products
Direct labor-hours
$503,000
O $704,200
Machine-hours
Number of setups
Number of products
Direct labor-hours
O $396,000
O $301,800
Total Cost
$ 330,000
$ 300,000
$ 46,000
2 products
$ 330,000 10,000 DLHs
Total Activity
15,000 MHs
Product
B820
7,000
200
3,000
500 setups
Using the plantwide overhead rate, how much manufacturing overhead cost
would be allocated to Product P99Y?
Product
P99Y
8,000
300
1
7,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F95046823-9e53-47d9-b862-36560469eb68%2F5544aa29-4ac6-4039-8008-e85299cdf587%2Fm3vybm_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Howard Corporation manufactures two products: Product B820 and Product
P99Y. 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 B820 and
P99Y.
Activity Cost Pool Activity Measure
Machining
Machine setups
Product design
Order size
Activity Measure
Machine-hours
Number of setups
Number of products
Direct labor-hours
$503,000
O $704,200
Machine-hours
Number of setups
Number of products
Direct labor-hours
O $396,000
O $301,800
Total Cost
$ 330,000
$ 300,000
$ 46,000
2 products
$ 330,000 10,000 DLHs
Total Activity
15,000 MHs
Product
B820
7,000
200
3,000
500 setups
Using the plantwide overhead rate, how much manufacturing overhead cost
would be allocated to Product P99Y?
Product
P99Y
8,000
300
1
7,000
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