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 | $ | 227,700 | 11,000 | MHs | ||
Machine setups | Number of setups | $ | 153,900 | 270 | setups | ||
Production design | Number of products | $ | 91,000 | 2 | products | ||
General factory | Direct labor-hours | $ | 257,000 | 10,000 | DLHs | ||
Activity Measure | Product Y | Product Z | ||||
Machining | 8,700 | 2,300 | ||||
Number of setups | 60 | 210 | ||||
Number of products | 1 | 1 | ||||
Direct labor-hours | 8,700 | 1,300 | ||||
11. Using the plantwide overhead rate, what percentage of the total overhead cost is allocated to Product Y and Product Z? (Round your intermediate calculations to 2 decimal places. Round your answers to 2 decimal places.)
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