Torello Corporation manufactures two products: Product H95V and Product V93N. 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 H95V and V93N. What is the company's plantwide overhead rate?
A) $180.50 per DLH
B) $27.00 per DLH
C) $72.20 per DLH
D) $120.33 per DLH

Question

Torello Corporation manufactures two products: Product H95V and Product V93N. 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 H95V and V93N.   What is the company's plantwide overhead rate?
A) $180.50 per DLH 
B) $27.00 per DLH 
C) $72.20 per DLH 
D) $120.33 per DLH

Quizplus · Accepted Answer

The company's plantwide overhead rate is computed as follows:
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Torello Corporation Manufactures Two Products: Product H95V and Product V93N