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Hickory Company manufactures two products-15,000 units of Product Y and 7,000 units of Product Z. The company uses a plantwide overhead rate based on direct
Hickory Company manufactures two products-15,000 units of Product Y and 7,000 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 $696,000 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 Expected Activity Activity Cost Pool Machining Machine setups Product design General factory Activity Measure Machine-hours Number of setups Number of products Direct labor-hours 254,000 13,200 DLHs Cost $ 224,400 11,000 MHs 129,600 88,000 240 setups 2 products Activity Measure Product YProduct Z Machine-hours Number of setups Number of products Direct labor-hours 7,400 60 3,600 180 8,400 4,800 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 14. Using the ABC system, what percentage of the Product Design cost is assigned to Product Y and Product Z? Product Y Product Z Product design cost
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