Foundational (Static) [LO4-1, LO4-2, LO4-3, LO4-4]

Skip to question

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 4-4 (Static)

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

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

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

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

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

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

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

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

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

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