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.Activity Cost PoolActivity MeasureTotal CostTotal ActivityMachiningMachine-hours$207,0009,000MHsMachine setupsNumber of setups$140,000350setupsProduct designNumber of products$98,0002products??Order sizeDirect labor-hours$340,00010,000DLHsActivity MeasureProduct O95CProduct M31NMachine-hours6,0003,000Number of setups190160Number of products11Direct labor-hours4,0006,000Using the ABC system, how much
total manufacturing overhead cost would be assigned to Product O95C?
A. $399,000
B. $136,000
C. $392,500
D. $263,000
Answer: A
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