Arizona Corporation manufactures two products: Product G$5$ and Product E$4.$ 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 G$5$ and E$4.$

Activity Cost Pool Activity Measure Total Cost Total Activity

Machining Machine$-$hours $ $100,0005,000$ MHs

Machine setups Number of setups $ $300,000500$ setups

Product design Number of products $ $80,0002$ products

Order size Direct labor$-$hours $ $350,00010,000$ DLHs

Activity Measure Product G$5$ Product E$4$

Machine$-$hours $2,0003,000$

Number of setups $270230$

Number of products $11$

Direct labor$-$hours $3,0007,000$

Required:

a$.$ Using the plantwide overhead rate, what amount of the total overhead cost is allocated to Product G$5?$

b$.$ Using the plantwide overhead rate, what amount of the total overhead cost is allocated to Product E$4?$

c$.$ Using the activity$-$based costing system, what amount of the total overhead cost is assigned to Product G$5?$

d$.$ Using the activity$-$based costing system, what amount of the total overhead cost is assigned to Product E$4?$

Answer rating: 100% (QA)

Ill be happy to help you with this question a Plantwide Overhead Rate To calculate the plantwide overhead rate we need to divide the total overhead co... View the full answer