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Chec [The following information applies to the questions displayed below.] Hickory Company manufactures two products-13,000 units of Product Y and 5,000 units of Product Z.
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Chec [The following information applies to the questions displayed below.] Hickory Company manufactures two products-13,000 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 $630,000 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 Machining Machine setups Product design Activity Measure Machine-hours Number of setups Number of products Estimated Overhead Cost $ 228,000 $ 40,000 Expected Activity 12,000 MHS 100 setups $ 74,000 2 products 14,400 DLHS General factory Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Direct labor-hours Product Y Product Z 10,000 40 2,000 60 1 1 7,000 7,400 $ 288,000 Required: 1. What is the company's plantwide overhead rate? Note: Round your answer to 2 decimal places. Activity Cost Pool Machining Machine setups Product design Activity Measure Machine-hours Number of setups Number of products COLUMBLE veritau Cost $ 228,000 $ 40,000 Expected Activity 12,000 MHS 100 setups. 2 products 14,400 DLHS General factory Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Direct labor-hours $ 74,000 $ 288,000 Product Y Product Z 10,000 40 2,000 60 1 1 7,000 7,400 Required: 1. What is the company's plantwide overhead rate? Note: Round your answer to 2 decimal places. Plantwide overhead rate per DLH 12 Activity Cost Pool Machining Machine setups Product design Activity Measure Machine-hours Number of setups Cost $ 228,000 $ 40,000 Expected Activity 12,000 MHs 100 setups 2 products. General factory Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Number of products $ 74,000 Direct labor-hours $ 288,000 14,400 DLHS Product Y Product Z 10,000 40 2,000 60 1 1 7,000 7,400 2. Using the plantwide overhead rate, how much manufacturing overhead cost is allocated to Product Y and Product Z? Note: Round your intermediate calculations to 2 decimal places and your final answers to the nearest whole dollar am Product Y Product Z Manufacturing overhead allocated Activity Cost Pool Machining Machine setups Product design General factory Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Activity Measure Machine-hours. Number of setups Number of products Direct labor-hours Estimated Overhead Cost $ 228,000 $ 40,000 $ 74,000 $ 288,000 Product Y 10,000 40 Product Z 2,000 60 1 1 7,000 7,400 Expected Activity 12,000 MHS 100 setups 2 products 14,400 DLHS 3. What is the activity rate for the Machining activity cost pool? Note: Round your answer to 2 decimal places. Activity rate per MH information is available for the company as a whole and for Products Y and Z: Activity Cost Pool Machining Machine setups Product design Activity Measure Machine-hours Number of setups Number of products Estimated Overhead Cost $ 228,000 $ 40,000 $ 74,000 $ 288,000 Expected Activity 12,000 MHs 100 setups. 2 products 14,400 DLHS General factory Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Direct labor-hours Product Y Product Z 10,000 40 1 2,000 60 1 7,000 7,400 4. What is the activity rate for the Machine Setups activity cost pool? Activity rate per setup 15 es Romation is available for the company as a whole and IoI PROCULIS A Activity Measure Machine-hours Number of setups Number of products Activity Cost Pool Machining Machine setups Product design General factory Activity Measure Machine-hours Number of setups Direct labor-hours Estimated Overhead Cost $ 228,000 $ 40,000 $ 74,000 $ 288,000 Product Y Product Z 10,000 40 2,000 60 Number of products 1 1 Direct labor-hours 7,000 7,400 Expected Activity 12,000 MHS 100 setups 2 products 14,400 DLHS 5. What is the activity rate for the Product Design activity cost pool? Activity rate per product Activity Cost Pool Machining Machine setups Product design General factory Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Estimated Overhead Cost $ 228,000 $ 40,000 $ 74,000 $ 288,000 Product Y Product Z 10,000 40 2,000 60 Number of products 1 1 Direct labor-hours 7,000 7,400 Activity Measure Machine-hours Number of setups Expected Activity 12,000 MHs 100 setups 2 products 14,400 DLHS 6. What is the activity rate for the General Factory activity cost pool? Note: Round your answer to 2 decimal places. Activity rate per DLH Activity Cost Pool Machining Machine setups Activity Measure Machine-hours Number of setups Estimated Overhead Cost $ 228,000 $ 40,000 Expected Activity 12,000 MHS 100 setups Product design Number of products: General factory Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Direct labor-hours Product Y Product Z 10,000 40 2,000 60 1 1 7,000 7,400 $ 74,000 2 products $ 288,000 14,400 DLHS 9. Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Y? Note: Round all intermediate calculations to 2 decimal places. Total manufacturing overhead cost B imation is available for the company as a wive and for Piuucts 1 and 2. Activity Cost Pool Machining Machine setups Product design Activity Measure Machine-hours Number of setups Number of products Estimated Overhead Cost $ 228,000 Expected Activity 12,000 MHS 100 setups $ 40,000 $ 74,000 2 products $ 288,000 14,400 DLHS. General factory Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Direct labor-hours Product Y Product Z 10,000 40 2,000 60 1 1 7,000 7,400 10. Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Z?. Total manufacturing overhead cost Activity Cost Pool Machining Machine setups Product design General factory Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Product Y Product Z 10,000 40 2,000 60 1 7,000 1 7,400 Cost $ 228,000 $ 40,000 Expected Activity 12,000 MHS 100 setups 2 products $ 74,000 $ 288,000 14,400 DLHS 11. Using the plantwide overhead rate, what percentage of the total overhead cost is allocated to Product Y and Product Z? Note: Round your "Percentage" answers to 2 decimal place. Manufacturing overhead Product Y % Product Z % Activity Cost Pool Machining Machine setups Product design General factory Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Product Y Product Z 10,000 40 1 2,000 60 1 7,000 7,400 Cost $ 228,000 $ 40,000 $ 74,000 Expected Activity 12,000 MHS 100 setups 2 products $ 288,000 14,400 DLHS 12. Using the ABC system, what percentage of the Machining costs is assigned to Product Y and Product Z? Note: Round your "Percentage" answers to 2 decimal places. Product Y Product Z Machining cost % % Activity Cost Pool Machining Machine setups Activity Measure Machine-hours Number of setups Cost $ 228,000 $ 40,000 Expected Activity 12,000 MHS 100 setups Product design Number of products $ 74,000 2 products General factory Activity Measure Machine-hours Number of setups Number of products. Direct labor-hours Direct labor-hours $ 288,000 14,400 DLHS Product Y Product Z 10,000 2,000 40 60 1 1 7,000 7,400 13. Using the ABC system, what percentage of Machine Setups cost is assigned to Product Y and Product Z? Note: Round your "Percentage" answers to 2 decimal places. Product Y Product Z Machine setups cost % % information is available for the company as a whole and for Products Y and Z Activity Cost Pool Machining 15 Machine setups Product design Activity Measure Machine-hours Number of setups Number of products Estimated Overhead Cost $ 228,000 Expected Activity 12,000 MHs $ 40,000 100 setups $ 74,000 $ 288,000 2 products 14,400 DLHS es General factory Activity Measure Machine-hours Number of setups Number of products Direct labor-hours. Direct labor-hours Product Y Product Z 10,000 40 2,000 60 1 1 7,000 7,400 14. Using the ABC system, what percentage of the Product Design cost is assigned to Product Y and Product Z? Product Y Product Z Product design cost % % Activity Cost Pool Machining Machine setups Product design Activity Measure Machine-hours Number of setups Number of products Cost $ 228,000 $ 40,000 Expected Activity 12,000 MHS 100 setups 2 products $ 74,000 General factory Activity Measure Machine-hours Number of setups Number of products Direct labor-hours $ 288,000 14,400 DLHS Product Y Product Z 10,000 40 2,000 60 1 1 Direct labor-hours 7,000 7,400 15. Using the ABC system, what percentage of the General Factory cost is assigned to Product Y and Product Z? Note: Round your "Percentage" answers to 2 decimal place. Product Y Product Z General factory cost % % 2. Assume that OfficeMart places orders more frequently, but everything else remains the same. On your worksheet increase the number of orders from 4 to 7. (Prior to completing this requirement, change all worksheet figures back to their original amounts.). 1 Chapter 5: Applying Excel A B C D E 2 3 Data 4 Manufacturing overhead $ 500,000 5 Selling and administrative overhead $ 300,000 6 7 Assembling Processing Supporting Other Units: Orders Customers 8 0123 Manufacturing overhead 9 Selling and administrative overhead 10 Total activity 11 50% 35% 5% 10% 10% 45% 25% 20% 1,000 250 100 units orders customers 13 OfficeMart orders: 14 Customers 1 customer Activate Window Required information 15 Orders 16 Number of filing cabinets ordered in total 17 Selling price 18 Direct materials 19 Direct labor 7 orders 80 units $ 595 $ 180 $ 50 (a) What is the customer margin under activity-based costing when the number of orders increases to 7? (Enter a loss as a negative amount.) Customer margin under activity-based costing (b) What is the product margin under the traditional costing system when the number of orders increases to 7? (Enter a loss as a negative amount.) Product margin under the traditional costing system (c) Which of the following statements are true? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) ? If a customer orders more frequently, but orders the same total numbrs of units over the course of a year, the customer margin under activity based costing will decrease. 2 If a customer orders more frequently, but orders the same total number of units over the course of a year, the product margin under a traditional costing system will decrease. Activate Windows 7 If a customer orders more frequently, but orders the same total number of units over the course of a year, the customer margin under activity based costing will be unaffected. If a customer orders more frequently, but orders the same total number of units over the course of a year, the product margin under a traditional costing system will be unaffected. 3. OfficeMart has found an error in its data. The percentage of selling and administrative overhead attributable to processing orders should be changed to 30% from 45% and the percentage attributable to supporting customers should be changed to 40% from 25% A B C D 1 Chapter 5: Applying Excel 2 3 Data 4 Manufacturing overhead: $ 500,000 5 Selling and administrative overhead $ 300,000 + 6 7 Assembling 8 Manufacturing overhead Units 50% Processing Orders E Supporting i Customers Other 35% 5% 10% Activate Windows 9 Selling and administrative overhead 10% 30% 40% 20% 10 Total activity 1,000 250 100 11 units orders customers 12 13 OfficeMart orders: 14 Customers 15 Orders 16 Number of filing cabinets ordered in total 17 Selling price 18 Direct materials 19 Direct labor 1 customer 7 orders 80 units 595 $ 180 $ 50 (a) Based on new number of orders in Requirement 2, what is the customer margin under activity-based costing when the data are corrected? (Enter a loss as a negative amount.) (a) Based on new number of orders in Requirement 2, what is the customer margin under activity-based costing when the data are corrected? (Enter a loss as a negative amount.) Customer margin under activity-based costing (b) Based on new number of orders in Requirement 2, what is the product margin under the traditional costing system when the data are corrected? (Enter a loss as a negative amount.) Product margin under the traditional costing system c) Which of the following statements are true about what happens when the percentage of selling and administrative overhead attributable to processing orders declines and the percentage of selling and administrative overhead attributable to supporting customers increases by the same amount? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) When the percentage of selling and administrative overhead attributable to processing orders declines and the percentage of selling and administrative overhead attributable to supporting customers increases by the same amount, costs are shifted from the processing orders cost pool to the supporting customers cost pool. When the percentage of selling and administrative overhead attributable to processing orders declines and the percentage of selling and administrative overhead attributable to supporting customers increases by the same amount, costs will be shifted from customers who order more frequently to those who order less frequently ? When the percentage of selling and administrative overhead attributable to processing orders declines and the percentage of selling and administrative overhead attributable to supporting customers increases by the same amount, the customer margins of those who order more frequently will increase relative to the customer margins of those who order less frequently Activate Windows
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