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 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 | $ | 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 labour-hours | $ | 307,200 | 12,000 | DLHs | |
Activity Measure | Product Y | Product Z |
Machining | 7,600 | 2,400 |
Number of setups | 50 | 210 |
Number of products | 1 | 1 |
Direct labour-hours | 8,600 | 3,400 |
Required:
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