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Greenwood 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
Greenwood 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 of its manufacturing overhead to four cost pools. The following edditional information is available for the company as a whole and for Products Y end Z Estimated Overhead Activity Cost Pool Machining Machine setups Production design General factory Cost Expected Activity 231,600 2,000 MHs Activity Measure Number of setups $55,900 130 setups 77000 2 products Number of products Direct labor-hours $364,500 5,000 DLHs Activity Measure Product Y Product Z 5,700 90 Machining Number of setups Number of product:s Direct labor-hours 6,3005 40 7,300 7,700
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