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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 $ 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

1a.

Which of the four activities is a product-level activity?

multiple choice

a. Product design activity

b. Machine setups activity

c. Machining activity

d. General factory activity

1b. Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Y?

Total manufacturing overhead cost

1c. Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Z?

Total manufacturing overhead cost

1d. Using the plantwide overhead rate, what percentage of the total overhead cost is allocated to Product Y and Product Z?

Product Y Product Z
Total overhead cost % %

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