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Fletes Corporation Manufactures Two Products: Product O95C and Product M31N

question 191

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Fletes Corporation manufactures two products: Product O95C and Product M31N. The company uses a plantwide overhead rate based on direct labor-hours. It 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 O95C and M31N. Fletes Corporation manufactures two products: Product O95C and Product M31N. The company uses a plantwide overhead rate based on direct labor-hours. It 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 O95C and M31N.   Using the ABC system, how much total manufacturing overhead cost would be assigned to Product O95C? A)  $392,500 B)  $136,000 C)  $399,000 D)  $263,000 Using the ABC system, how much total manufacturing overhead cost would be assigned to Product O95C?


Definitions:

Sales Decrease

A reduction in the amount of goods or services sold by a business within a specific time period.

Equity Financing

The method of raising capital through the sale of shares, offering investors ownership interests in the company.

Profit Margin

A financial metric that measures the percentage of profit a company retains after deducting its expenses from its total revenue.

Current Liabilities

Financial obligations a company owes and is due within a year.

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