Immen Corporation manufactures two products: Product B82O and Product P99Y. 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 B82O and P99Y.
Activity Cost Pool Activity Measure Total Cost Total Activity
Machining Machine-hours $ 330,000 15,000 MHs
Machine setups Number of setups $ 300,000 500 setups
Product design Number of products $ 46,000 2 products
Order size Direct labor-hours $ 330,000 10,000 DLHs
Activity Measure Product B82O Product P99Y
Machine-hours 7,000 8,000
Number of setups 200 300
Number of products 1 1
Direct labor-hour 3,000 7,000
Required:
1. Using the plantwide overhead rate, how much manufacturing overhead cost would be allocated to Product P99Y?