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 5.
What is the activity rate for the Product Design activity cost pool?
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