Orear Corporation manufactures two products: Product Z34D and Product J25M. 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 Z34D and J25M.Activity Cost PoolActivity MeasureTotal CostTotal ActivityMachiningMachine-hours$120,0006,000MHsMachine setupsNumber of setups$90,000150setupsProduct designNumber of products$84,0002productsOrder sizeDirect labor-hours$300,00010,000DLHsActivity MeasureProduct Z34DProduct J25MMachine-hours4,0002,000Number of setups9060Number of products11Direct labor-hours7,0003,000Using the plantwide overhead rate, the
percentage of the total overhead cost that is allocated to Product J25M is closest to:
A. 30.00%
B. 50.00%
C. 15.15%
D. 19.87%
Answer: A
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