Assume a company produces and sells only two products-14,000 units of Product A and 6,000 units...

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Assume a company produces and sells only two products-14,000 units of Product A and 6,000 units of Product B. The selling prices are $65 per unit for Product A and $96 per unit for Product B. Product A's direct materials and direct labor costs per unit are $30 and $12, respectively. Product B's direct materials and direct labor costs per unit are $34 and $15, respectively. The company uses a plantwide overhead rate based on direct labor dollars. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to three cost pools. The following additional information is available for the company as a whole and for Products A and B: Estimated Overhead Activity Cost Pool Machining Machine setups Product design Activity Measure Machine-hours Cost $ 300,000 $ 150,000 $ 80,000 Expected Activity 15,000 MH 200 Setups Number of setups Number of products 2 Products Activity Measure Machine-hours Product A Product B 9,000 6,000 Number of setups Number of products 50 150 1 1 The company's plantwide overhead rate is closest to: Multiple Choice 205%, 274%. 266%. 286%. Assume a company produces and sells only two products-14,000 units of Product A and 6,000 units of Product B. The selling prices are $65 per unit for Product A and $96 per unit for Product B. Product A's direct materials and direct labor costs per unit are $30 and $12, respectively. Product B's direct materials and direct labor costs per unit are $34 and $15, respectively. The company uses a plantwide overhead rate based on direct labor dollars. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to three cost pools. The following additional information is available for the company as a whole and for Products A and B: Estimated Overhead Activity Cost Pool Machining Machine setups Product design Activity Measure Machine-hours Cost $ 300,000 $ 150,000 $ 80,000 Expected Activity 15,000 MH 200 Setups Number of setups Number of products 2 Products Activity Measure Machine-hours Product A Product B 9,000 6,000 Number of setups Number of products 50 150 1 1 The company's plantwide overhead rate is closest to: Multiple Choice 205%, 274%. 266%. 286%.

Answer rating: 100% (QA)

Answer Solution Answer Part A Estimated overhead Expected Activity Measure Machine hours Activity Ra... View the full answer