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31-34 Hickory Company manufactures two products13,000 units of Product Y and 5,000 units of Product Z. The company uses a plantwide overhead rate based on

31-34

Hickory Company manufactures two products13,000 units of Product Y and 5,000 units of Product Z. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates all $829,500 of its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products Y and Z:

Activity Cost Pool Activity Measure Estimated Overhead Cost Expected Activity
Machining Machine-hours $ 246,000 12,000 MHs
Machine setups Number of setups $ 137,500 250 setups
Product design Number of products $ 89,000 2 products
General factory Direct labor-hours $ 357,000 14,400 DLHs

Activity Measure Product Y Product Z
Machine-hours 7,500 4,500
Number of setups 40 210
Number of products 1 1
Direct labor-hours 8,500 5,900

1. What is the companys plantwide overhead rate?

2. Using the plantwide overhead rate, how much manufacturing overhead cost is allocated to Product Y and Product Z? (Round your intermediate calculations to 2 decimal places and your final answers to the nearest whole dollar amount.)

3. What is the activity rate for the Machining activity cost pool? (Round your answer to 2 decimal places.)

4. What is the activity rate for the Machine Setups activity cost pool?

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