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 | $ | 231,000 | 11,000 | MHs |
| Machine setups | Number of setups | $ | 180,000 | 300 | setups |
| Production design | Number of products | $ | 94,000 | 2 | products |
| General factory | Direct labor-hours | $ | 260,000 | 10,000 | DLHs |
| Activity Measure | Product Y | Product Z | ||||||||||||||||
| Machining | 8,000 | 3,000 | ||||||||||||||||
| Number of setups | 60 | 240 | ||||||||||||||||
| Number of products | 1 | 1 | ||||||||||||||||
| Direct labor-hours | 9,000 | 1,000 | ||||||||||||||||
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Audit Risk Management Driving Audit Value The Best Practice Strategy Guide For Minimising The Audit Risks And Achieving The Internal Audit Strategies And Objectives Volume 2
Authors: Hans Beumer
1st Edition
3906861155, 978-3906861159
