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 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 | Activity Measure | Estimated Overhead Cost | Expected Activity | |||
Machining | Machine-hours | $ | 231,600 | 12,000 | MHs | |
Machine setups | Number of setups | $ | 55,900 | 130 | setups | |
Production design | Number of products | $ | 77,000 | 2 | products | |
General factory | Direct labour-hours | $ | 364,500 | 15,000 | DLHs | |
Activity Measure | Product Y | Product Z |
Machining | 6,300 | 5,700 |
Number of setups | 40 | 90 |
Number of products | 1 | 1 |
Direct labour-hours | 7,300 | 7,700 |
Required:
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 final answers to the nearest dollar amount.)
Manufacturing overhead allocated Product Y=
Product Z=
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