Leader Corporation manufactures two products: Product Alfa and Product Beta. 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 Alfa and Beta. Activity Cost Pool Machining Machine setups Product design General factory Activity Measure Total Cost Total Activity Machine-hours $144,000 9,000 MHS Number of setups $100,000 250 setups Number of products $52,000 2 products Direct labor-hours $280,000 10,000 DLHS Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Product Alfa Product Beta 5,000 4,000 100 150 1 1 3,000 7,000 Required: a. Using the plantwide overhead rate, how much manufacturing overhead cost would be allocated to Product Alfa? b. Using the plantwide overhead rate, how much manufacturing overhead cost would be allocated to Product Beta? c. Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Alfa? d. Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Beta? 20
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