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 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 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 |
Production 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 |
|
1.) What is the companys plantwide overhead rate? (Round your answer to 2 decimal places.)
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 final answers to the nearest dollar amount.)
3.) What is the activity rate for the Machining activity cost pool? (Round your answer to 2 decimal places.)
4.) What is the activity rate for the Machine Setups activity cost pool?
5.) What is the activity rate for the Product Design activity cost pool?
Thank you so much to anyone who can help me.
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