Hickory Company manufactures two productsâ14,000 units ofProduct Y and 6,000 units of Product Z. The company uses aplantwide overhead rate based on direct labor-hours. It isconsidering implementing an activity-based costing (ABC) systemthat allocates all of its manufacturing overhead to four costpools. The following additional information is available for thecompany as a whole and for Products Y and Z:
Activity CostPool ActivityMeasure Estimated Overhead Cost Expected Activity Machining Machine-hours $ 203,000 10,000 MHs Machine setups Number of setups $ 121,900 230 setups Productiondesign Number of products $ 87,000 2 products General factory Direct labor-hours $ 379,500 12,000 DLHs
ActivityMeasure Product Y Product Z Machine-hours 7,300 2,700 Number ofsetups 50 180 Number ofproducts 1 1 Directlabor-hours 9,500 2,500
1. What is the companyâs plantwide overhead rate? (Roundyour answer to 2 decimal places.)
2. Using the plantwide overhead rate, how much manufacturingoverhead cost is allocated to Product Y and Product Z?(Round your intermediate calculations to 2 decimal placesand final answers to the nearest dollar amount.)
3. What is the activity rate for the Machining activity costpool? (Round your answer to 2 decimal places.
4. What is the activity rate for the Machine Setups activitycost pool?
5. What is the activity rate forthe Product Design activity cost pool?
Hickory Company manufactures two productsâ14,000 units ofProduct Y and 6,000 units of Product Z. The company uses aplantwide overhead rate based on direct labor-hours. It isconsidering implementing an activity-based costing (ABC) systemthat allocates all of its manufacturing overhead to four costpools. The following additional information is available for thecompany as a whole and for Products Y and Z: |
| Activity CostPool | ActivityMeasure | Estimated Overhead Cost | Expected Activity | ||
| Machining | Machine-hours | $ | 203,000 | 10,000 | MHs |
| Machine setups | Number of setups | $ | 121,900 | 230 | setups |
| Productiondesign | Number of products | $ | 87,000 | 2 | products |
| General factory | Direct labor-hours | $ | 379,500 | 12,000 | DLHs |
| ActivityMeasure | Product Y | Product Z | |
| Machine-hours | 7,300 | 2,700 | |
| Number ofsetups | 50 | 180 | |
| Number ofproducts | 1 | 1 | |
| Directlabor-hours | 9,500 | 2,500 | |
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2. Using the plantwide overhead rate, how much manufacturingoverhead cost is allocated to Product Y and Product Z?(Round your intermediate calculations to 2 decimal placesand final answers to the nearest dollar amount.) 3. What is the activity rate for the Machining activity costpool? (Round your answer to 2 decimal places. 4. What is the activity rate for the Machine Setups activitycost pool?
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Related questions
Hickory Company manufactures two productsâ15,000 units ofProduct Y and 7,000 units of Product Z. The company uses aplantwide overhead rate based on direct labor-hours. It isconsidering implementing an activity-based costing (ABC) systemthat allocates all of its manufacturing overhead to four costpools. The following additional information is available for thecompany as a whole and for Products Y and Z: (The totalestimated overhead cost may not agree with the sum of allocatedoverhead costs to each product.) |
| Activity CostPool | ActivityMeasure | Estimated Overhead Cost | Expected Activity | ||
| Machining | Machine-hours | $ | 227,700 | 11,000 | MHs |
| Machine setups | Number of setups | $ | 153,900 | 270 | setups |
| Productiondesign | Number of products | $ | 91,000 | 2 | products |
| General factory | Direct labor-hours | $ | 257,000 | 10,000 | DLHs |
| ActivityMeasure | Product Y | Product Z |
| Machining | 7,700 | 3,300 |
| Number ofsetups | 60 | 210 |
| Number ofproducts | 1 | 1 |
| Directlabor-hours | 8,700 | 1,300 |
| Required: |
| Using the ABC system, how muchtotal manufacturing overhead cost would be assigned to ProductY?(Round your intermediate calculations to 2 decimal placesand final answers to the nearest dollar amount.) |
| Total manufacturingoverhead cost | $ |
Hickory Company manufactures two productsâ14,000 units ofProduct Y and 6,000 units of Product Z. The company uses aplantwide overhead rate based on direct labor-hours. It isconsidering implementing an activity-based costing (ABC) systemthat allocates all of its manufacturing overhead to four costpools. The following additional information is available for thecompany as a whole and for Products Y and Z: |
| Activity CostPool | ActivityMeasure | Estimated Overhead Cost | Expected Activity | ||
| Machining | Machine-hours | $ | 203,000 | 10,000 | MHs |
| Machine setups | Number of setups | $ | 121,900 | 230 | setups |
| Productiondesign | Number of products | $ | 87,000 | 2 | products |
| General factory | Direct labor-hours | $ | 379,500 | 12,000 | DLHs |
| ActivityMeasure | Product Y | Product Z |
| Machine-hours | 7,300 | 2,700 |
| Number ofsetups | 50 | 180 |
| Number ofproducts | 1 | 1 |
| Directlabor-hours | 9,500 | 2,500 |
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12. Using the ABC system, what percentage of the Machining costsis assigned to Product Y and Product Z? (Round yourintermediate calculations to 2 decimal places. Round your"Percentage" answers to 2 decimal places. (i.e. 0.1234 should beentered as 12.34).) 13. Using the ABC system, what percentage of Machine Setups costis assigned to Product Y and Product Z? (Round yourintermediate calculations to 2 decimal places. Round your"Percentage" answers to 2 decimal places. (i.e. 0.1234 should beentered as 12.34).) 14. Using the ABC system, what percentage of the Product Designcost is assigned to Product Y and Product Z? (Round youranswers to 2 decimal places.) 15. Using the ABC system, what percentage of the General Factorycost is assigned to Product Y and Product Z? (Round yourintermediate calculations to 2 decimal places. Round your"Percentage" answers to 2 decimal places. (i.e. 0.1234 should beentered as 12.34).) | ||
Hickory Company manufactures two productsâ13,000 units ofProduct Y and 5,000 units of Product Z. The company uses aplantwide overhead rate based on direct labor-hours. It isconsidering implementing an activity-based costing (ABC) systemthat allocates all of its manufacturing overhead to four costpools. The following additional information is available for thecompany as a whole and for Products Y and Z: |
| Activity CostPool | ActivityMeasure | Estimated Overhead Cost | Expected Activity | ||
| Machining | Machine-hours | $ | 228,000 | 12,000 | MHs |
| Machine setups | Number of setups | $ | 40,000 | 100 | setups |
| Productiondesign | Number of products | $ | 74,000 | 2 | products |
| General factory | Direct labor-hours | $ | 288,000 | 14,400 | DLHs |
| ActivityMeasure | Product Y | Product Z | |||||
| Machine-hours | 10,000 | 2,000 | |||||
| Number ofsetups | 40 | 60 | |||||
| Number ofproducts | 1 | 1 | |||||
| Directlabor-hours | 7,000 | 7,400 | |||||
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