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 | $ 210,100 | 11,000 | MHs |
| Machine setups | Number of setups | $ 45,100 | 110 | setups |
| Production design | Number of products | $ 75,000 | 2 | products |
| General factory | Direct labor-hours | $ 241,000 | 10,000 | DLHs |
| Activity Measure | Product Y | Product Z |
|---|---|---|
| Machining | 7,100 | 3,900 |
| Number of setups | 60 | 50 |
| Number of products | 1 | 1 |
| Direct labor-hours | 7,100 | 2,900 |
Foundational 4-14 (Algo)
14. Using the ABC system, what percentage of the Product Design cost is assigned to Product Y and Product Z? (Round your answers to 2 decimal places.)
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Intermediate accounting
Authors: J. David Spiceland, James Sepe, Mark Nelson
7th edition
978-0077614041, 9780077446475, 77614046, 007744647X, 77647092, 978-0077647094
