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 $745,200 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 $ 242,400 12,000 MHs
Machine setups Number of setups $ 114,400 220 setups
Product design Number of products $ 86,000 2 products
General factory Direct labor-hours $ 302,400 14,400 DLHs
Activity Measure Product Y Product Z
Machine-hours 7,200 4,800
Number of setups 40 180
Number of products 1 1
Direct labor-hours 8,200 6,200
13. Using the ABC system, what percentage of Machine Setups cost is assigned to Product Y and Product Z? (Round your "Percentage" answers to 2 decimal places.)
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