Hickory Company manufactures two products14,000 units of Product Y and 6,000 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 $586,500 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	$	195,000	10,000	MHs
Machine setups	Number of setups	$	67,500	150	setups
Product design	Number of products	$	79,000	2	products
General factory	Direct labor-hours	$	245,000	12,000	DLHs

Activity Measure	Product Y	Product Z
Machine-hours	6,500	3,500
Number of setups	50	100
Number of products	1	1
Direct labor-hours	7,500	4,500

7. Which of the four activities is a batch-level activity?

multiple choice

• General factory activity

• Machining activity

• Machine setups activity

• Product design activity