Meli Corporation manufactures two products: Product L61P and Product B60E. 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 L61P and B60E.Activity Cost PoolActivity MeasureTotal CostTotal ActivityMachiningMachine-hours$280,00014,000MHsMachine setupsNumber of setups$225,000450setupsProduct designNumber of products$84,0002productsOrder sizeDirect labor-hours$310,00010,000DLHsActivity MeasureProduct L61PProduct B60EMachine-hours6,0008,000Number of setups290160Number of products11Direct labor-hours7,0003,000Using the plantwide overhead rate, the
percentage of the total overhead cost that is allocated to Product B60E is closest to:
A. 30.00%
B. 10.34%
C. 50.00%
D. 31.37%
Answer: A
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