Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Hickory Company manufactures two products-14,000 units of Product Y and 6,000 units of Product Z. The company uses a plantwide overhead rate based on direct
Hickory Company manufactures two products-14,000 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 $791,400 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: Estimated Overhead Cost Expected Activity Activity Cost Pool Machining Machine setups Product desigrn General factory Activity Measure Machine-hours Number of setups Number of products Direct labor-hours379,500 12,000 DLHs $ 203,000 10,000 MHs $ 121,900 87,000 230 setups 2 products Activity Measure Product YProduct z Machine-hours Number of setups Number of products Direct labor-hours 7,300 50 2,700 180 1 2,500 9,500 Required: 1. What is the company's plantwide overhead rate? (Round your answer to 2 decimal places.) Plantwide overhead rate per DLH 2. 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 your final answers to the nearest whole dollar amount.) Product Y Product Z Manufacturing overhead allocated 3. What is the activity rate for the Machining activity cost pool? (Round your answer to 2 decimal places.) Activity rate per MH 4. What is the activity rate for the Machine Setups activity cost pool? Activity rate per setup 5. What is the activity rate for the Product Design activity cost pool? Activity rate per product 6. What is the activity rate for the General Factory activity cost pool? (Round your answer to 2 decimal places.) Activity rate per DLH
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started