Hickory Company manufactures two products-13,000 units of Product Y and 5,000 units of Product Z. The company uses a plantwide overhead rate based on direct labour-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: (The total estimated overhead cost may not agree with the sum of allocated overhead costs to each product.) Activity Cost Pool Machining Machine setups Production design General factory Activity Measure Machining Number of setups Number of products Direct labour-hours Activity Measure Machine-hours Number of setups Number of products Direct labour-hours Activity rate Product Y Product Z 7,500 4,500 40 210 1 1 8,500 5,500 Estimated Overhead Cost Expected Activity 12,000 MHs Required: What is the activity rate for the Machine Setups activity cost pool? per setup $246,000 $137,500 $ 89,000 $357,000 250 setups 2 products 14,000 DLHs

Hickory Company manufactures two products 13,000 units of Product Y and 5,000 units of Product Z. The company uses a plantwide overhead rate based on direct labour-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 avallable for the company as a whole and for Products Y and Z. (The total estimated overhead cost may not agree with the sum of ollocated overheod costs to each product.) Required: What is the activity rate for the Machine Setups activity cost pool