ACC 202 Chapter Notes - Chapter 7: Cost Accounting, Earnings Before Interest And Taxes, Expense
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Hickory Company manufactures two products—15,000 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 | $ |