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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 |
6. What is the activity rate for the General Factory activity cost pool
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