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Kawaii Corporation manufactures two products: Kawaii Pens and Kawaii Pencils. It is considering changing to...

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Accounting

Kawaii Corporation manufactures two products: Kawaii Pens and Kawaii Pencils. It is considering changing to an activity-based costing (ABC) system where manufacturing overhead costs will be put into four cost pools. The company currently uses a plantwide overhead rate based on direct labor-hours. The following additional information is available for the Kawaii Pens and Kawaii Pencils as well as all of Kawaii Corporation.

Activity Cost Pool

Activity Measure

Total Cost

Total Activity

Machining

Machine-hours

$

247,000

13,000

MHs

Machine setups

Number of setups

$

60,000

150

setups

Product design

Number of products

$

56,000

2

products

Order size

Direct labor-hours

$

260,000

10,000

DLHs

Activity Measure

Kawaii Pens

Kawaii Pencils

Machine-hours

10,000

3,000

Number of setups

110

40

Number of products

1

1

Direct labor-hours

6,000

4,000

Using the plantwide overhead rate, how much manufacturing overhead cost would be allocated to Kawaii Pencils?

Question 11 options:

$249,200

$311,500

$373,800

$418,000

Answer & Explanation Solved by verified expert
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