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 | $ | 224,400 | 11,000 | MHs | ||
Machine setups | Number of setups | $ | 129,600 | 240 | setups | ||
Production design | Number of products | $ | 88,000 | 2 | products | ||
General factory | Direct labor-hours | $ | 254,000 | 10,000 | DLHs | ||
Activity Measure | Product Y | Product Z | ||||
Machining | 8,400 | 2,600 | ||||
Number of setups | 60 | 180 | ||||
Number of products | 1 | 1 | ||||
Direct labor-hours | 8,400 | 1,600 |
11.Using the plantwide overhead rate, what percentage of the total overhead cost is allocated to Product Y and Product Z?
12.Using the ABC system, what percentage of the Machining costs is assigned to Product Y and Z?
13. Using the ABC system, what percentage of Machine Setups cost is assigned to Product Y and Z?
14. Using the ABC system, what percentage of the Product Design cost is assigned to Product Y and Z?
15.Using the ABC system, what percentage of the General Factory cost is assigned to Product Y and Z?
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