Arrojo Corporation manufactures two products: Product X71B and Product C91I. 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 X71B and C91I.Activity Cost PoolActivity MeasureTotal CostTotal ActivityMachiningMachine-hours$275,00011,000MHsMachine setupsNumber of setups$210,000350setupsProduct designNumber of products$48,0002productsOrder sizeDirect labor-hours$300,00010,000DLHsActivity MeasureProduct X71BProduct C91IMachine-hours5,0006,000Number of setups220130Number of products11Direct labor-hours6,0004,000Using the plantwide overhead rate, how
much manufacturing overhead cost would be allocated to Product X71B?
A. $372,000
B. $499,800
C. $333,200
D. $416,500
Answer: B
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