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 | $ | 228,000 | 12,000 | MHs |
Machine setups | Number of setups | $ | 40,000 | 100 | setups |
Production design | Number of products | $ | 74,000 | 2 | products |
General factory | Direct labor-hours | $ | 288,000 | 12,000 | DLHs |
Activity Measure | Product Y | Product Z |
Machining | 6,000 | 6,000 |
Number of setups | 40 | 60 |
Number of products | 1 | 1 |
Direct labor-hours | 7,000 | 5,000 |
Using the ABC system, what percentage of Machine Setups cost is assigned to Product Y and Product Z? (Round your answers to 2 decimal places.) | |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started