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
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 | $ | 192,000 | 10,000 | MHs |
Machine setups | Number of setups | $ | 50,400 | 120 | setups |
Production design | Number of products | $ | 76,000 | 2 | products |
General factory | Direct labor-hours | $ | 387,200 | 16,000 | DLHs |
Activity Measure | Product Y | Product Z |
Machining | 6,200 | 3,800 |
Number of setups | 50 | 70 |
Number of products | 1 | 1 |
Direct labor-hours | 7,200 | 8,800 |
Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Y? (Round your intermediate calculations to 2 decimal places and final answer to the nearest dollar amount.)
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