Answer to Question #185897 in Accounting for foshix

Question

66) Cambra Corporation manufactures two products: Product N70E and Product F54Y. The

company 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 N70E and F54Y.

Activity Cost Pool Activity Measure Total Cost Total Activity

Machining Machine-hours $ 171,000 9,000 MHs

Machine setups Number of setups $ 150,000 250 setups

Product design Number of products $ 78,000 2 products

General factory Direct labor-hours $ 330,000 10,000 DLHs

Activity Measure Product N70E Product F54Y

Machine-hours 5,000 4,000

Number of setups 150 100

Number of products 1 1

Direct labor-hours 4,000 6,000

Using the ABC system, the percentage of the total overhead cost that is assigned to Product

F54Y is closest to:

A) 51.17%

B) 27.16%

C) 50.00%

D) 24.01%

Answer 1

Calculate the total overhead cost.

percent of F54Y = 373000$\times$ 100$/$ 729000 = 51.17$\%$