Foundational [LO4-1, LO4-2, LO4-3, LO4-4]

Greenwood Company manufactures two products14,000 units of Product Y and 6,000 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 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	$	200,000			10,000	MHs
Machine setups	Number of setups	$	100,000			200	setups
Production design	Number of products	$	84,000			2	products
General factory	Direct labor-hours	$	300,000			12,000	DLHs

Activity Measure	Product Y			Product Z
Machining		8,000			2,000
Number of setups		40			160
Number of products		1			1
Direct labor-hours		9,000			3,000

Foundational 4-1

Required:

1. What is the companys plantwide overhead rate?

Plantwide overhead rate

per DHL ?

2. Using the plantwide overhead rate, how much manufacturing overhead cost is allocated to Product Y and Product Z?

Manufacuring overhead allocated	Product Y	Product Z
	?	?

3. What is the activity rate for the Machining activity cost pool?

Activity Rate

? Per MH

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

Activity Rate

? Per Setup

5. What is the activity rate for the Product Design activity cost pool?

Activity Rate

? Per Product

6. What is the activity rate for the General Factory activity cost pool?

Activity rate

? Per DHL

7. Which of the four activities is a batch-level activity?

a. General factory activity

b. Product design activity

c. Machine setups activity

d. Machining activity

8. Which of the four activities is a product-level activity?

a. General factory activity

b. Machine setups activity

c. Machining activity

d. Product design activity

9. Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Y?

Total manufactoring overhead cost

?

10. Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Z?

Total maufacoring overhead cost

?

11. Using the plantwide overhead rate, what percentage of the total overhead cost is allocated to Product Y and Product Z?

Total overhead cost	Product Y	Product Z
	?%	?%

12. Using the ABC system, what percentage of the Machining costs is assigned to Product Y and Product Z?

Matching Cost	Product Y	Product Z
	?%	?%

13. Using the ABC system, what percentage of Machine Setups cost is assigned to Product Y and Product Z?

Machine Setups Cost	Product Y	Product Z
	?%	?%

14. Using the ABC system, what percentage of the Product Design cost is assigned to Product Y and Product Z?

Product Design Cost	Product Y	Product Z
	?%	?%

15. Using the ABC system, what percentage of the General Factory cost is assigned to Product Y and Product Z?

General factory cost	Product Y	Product Z
	?%	?%