Question 28 Not yet answered Points out of 3 P Flag question

Question 28 Not yet answered Points out of 3 P Flag question Walsh Corporation manufactures two produ cts: Product L61P and Product B60E. The company uses a plantwide overhead rate based on direct labor-hours. t 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 L61P and B60E. Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Activity Cost Pool Total Cost Total Activity $ 280,000 14,000 MHs $ 225,000 450 setups $ 84,0002 products $ 310,000 10,000 DLHs Machining Machine setups Product design General factory Product Product L61P B60E 6,000 8,000 290 160 Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Using the plantwide overhead rate, the percentage of the total overhead cost that is allocated to Product 7,000 3,000

Solution

Answer

Percentage of total overhead allocated =( $ 671,300 / $ 959,000 ) x 100 = 70%