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 $813,600 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 | $ 249,600 | 12,000 | MHs |
Machine setups | Number of setups | $ 162,400 | 280 | setups |
Product design | Number of products | $ 92,000 | 2 | products |
General factory | Direct labor-hours | $ 309,600 | 14,400 | DLHs |
Activity Measure | Product Y | Product Z |
---|---|---|
Machine-hours | 7,800 | 4,200 |
Number of setups | 40 | 240 |
Number of products | 1 | 1 |
Direct labor-hours | 8,800 | 5,600 |
Foundational 7-12 (Algo)
12. Using the ABC system, what percentage of the Machining costs is assigned to Product Y and Product Z?
Note: Round intermediate calculations and your "Percentage" answers to 2 decimal places.
13. Using the ABC system, what percentage of Machine Setups cost is assigned to Product Y and Product Z?
Note: Round intermediate calculations to 2 decimal places. Round your "Percentage" answers to 2 decimal places.
14. Using the ABC system, what percentage of the Product Design cost is assigned to Product Y and Product Z?
15. Using the ABC system, what percentage of the General Factory cost is assigned to Product Y and Product Z?
Note: Round intermediate calculations to 2 decimal places. Round your "Percentage" answers to 2 decimal place.
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