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Greenwood Company manufactures two products - 14,000 units of Product Y and 6,000 units of Product Z The Company uses a plantwide overhead rate based
Greenwood Company manufactures two products - 14,000 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 to | |||||||||
four cost pools. The following additional information is available for the company as a whole and for Products Y an 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 | |||||||
1. What is the company's plantwide overhead rate? | |||||||||
2. Using the plantwide overhead rate, how much manufacturing overhead cost is allocated to Product Y? | |||||||||
How much is allocated to Product Z? | |||||||||
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