Question
Greenwood 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
Greenwood 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 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 | $ | 249,600 | 12,000 | MHs |
Machine setups | Number of setups | $ | 162,400 | 280 | setups |
Production design | Number of products | $ | 92,000 | 2 | products |
General factory | Direct labor-hours | $ | 309,600 | 12,000 | DLHs |
Activity Measure | Product Y | Product Z |
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Machining | 7,800 | 4,200 |
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Number of setups | 40 | 240 |
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Number of products | 1 | 1 |
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Direct labor-hours | 8,800 | 3,200 |
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1. | What is the companys plantwide overhead rate? (Round your answer to 2 decimal places.) Predetermined overhead rate_____ per DLH
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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 final answers to the nearest dollar amount.) Manufacturing overhead allocated: Product Y _______ Product Z____________
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