Question
Hickory Company manufactures two products13,000 units of Product Y and 5,000 units of Product Z. The company uses a plantwide overhead rate based on direct
Hickory Company manufactures two products13,000 units of Product Y and 5,000 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 $829,500 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 | $ | 246,000 | 12,000 | MHs |
Machine setups | Number of setups | $ | 137,500 | 250 | setups |
Product design | Number of products | $ | 89,000 | 2 | products |
General factory | Direct labor-hours | $ | 357,000 | 14,400 | DLHs |
Activity Measure | Product Y | Product Z |
Machine-hours | 7,500 | 4,500 |
Number of setups | 40 | 210 |
Number of products | 1 | 1 |
Direct labor-hours | 8,500 | 5,900 |
Using the plantwide overhead rate, how much manufacturing overhead cost is allocated to Product Y and Product Z? (Round your intermediate calculations to 2 decimal places and your final answers to the nearest whole dollar amount.)
What is the activity rate for the Machining activity cost pool? (Round your answer to 2 decimal places.
What is the activity rate for the Machine Setups activity cost pool?
What is the activity rate for the Product Design activity cost pool?
What is the activity rate for the General Factory activity cost pool? (Round your answer to 2 decimal places.)
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