Question
Greenwood Company manufactures two products15,000 units of Product Y and 7,000 units of Product Z. The company uses a plantwide overhead rate based on direct
Greenwood Company manufactures two products15,000 units of Product Y and 7,000 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 | $ | 216,700 | 11,000 | MHs | ||
Machine setups | Number of setups | $ | 79,900 | 170 | setups | ||
Production design | Number of products | $ | 81,000 | 2 | products | ||
General factory | Direct labor-hours | $ | 247,000 | 10,000 | DLHs | ||
Activity Measure | Product Y | Product Z | ||||
Machining | 7,700 | 3,300 | ||||
Number of setups | 60 | 110 | ||||
Number of products | 1 | 1 | ||||
Direct labor-hours | 7,700 | 2,300 | ||||
6. What is the activity rate for the General Factory activity cost pool?
7. Which of the four activities is a batch-level activity?
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Machining activity
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General factory activity
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Product design activity
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Machine setups activity
8. Which of the four activities is a product-level activity?
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Machine setups activity
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Product design activity
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Machining activity
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General factory activity
9. Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Y?
10. Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Z? (Round your intermediate calculations to 2 decimal places. Round your answers to the nearest dollar amount.)
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