Weissman Corporation manufactures two products: Product E16S and Product P17K. The company is considering implementing...
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Accounting
Weissman Corporation manufactures two products: Product E16S and Product P17K. 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 E16S and P17K.
Activity Cost Pool
Activity Measure
Total Cost
Total Activity
Machining
Machine-hours
$ 220,000
11,000
MHs
Machine setups
Number of setups
$ 240,000
400
setups
Product design
Number of products
$ 74,000
2
products
Order size
Direct labor-hours
$ 270,000
10,000
DLHs
Activity Measure
Product E16S
Product P17K
Machine-hours
7,000
4,000
Number of setups
270
130
Number of products
1
1
Direct labor-hours
3,000
7,000
Using the ABC system, the percentage of the total overhead cost that is assigned to Product E16S is closest to:
Multiple Choice
52.24%
42.16%
10.07%
50.00%
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