Question
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
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 $748,800 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 | $ 206,000 | 10,000 | MHs |
Machine setups | Number of setups | $ 145,600 | 260 | setups |
Product design | Number of products | $ 90,000 | 2 | products |
General factory | Direct labor-hours | $ 307,200 | 12,000 | DLHs |
Activity Measure | Product Y | Product Z |
---|---|---|
Machine-hours | 7,600 | 2,400 |
Number of setups | 50 | 210 |
Number of products | 1 | 1 |
Direct labor-hours | 8,600 | 3,400 |
12. Using the ABC system, what percentage of the Machining costs is assigned to Product Y and Product Z? (Round 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? (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? (Round your "Percentage" answers to 2 decimal place.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
To determine the percentage of costs assigned to Product Y and Product Z under the ABC system we nee...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