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. Using the plantwide overhead rate, how much manufacturing overhead cost would be allocated to Product V93N?
A) $429,000
B) $433,200
C) $288,800
D) $361,000

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.   Using the plantwide overhead rate, how much manufacturing overhead cost would be allocated to Product V93N?
A) $429,000 
B) $433,200 
C) $288,800 
D) $361,000

Quizplus · Accepted Answer

The company's plantwide overhead rate is computed as follows:
 11eacbfc_c66d_e7cb_8ffe_c589f7181477_TB7552_00 Using the plantwide overhead rate, the manufacturing overhead cost that would be allocated to Product V93N is computed as follows:
 11eacbfc_c66d_e7cc_8ffe_fd77a38ed697_TB7552_00

Torello Corporation Manufactures Two Products: Product H95V and Product V93N