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Hickory Company manufactures two products15,000 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 products15,000 units of Product Y and 7,000 units of Product Z. The company uses a plantwide overhead rate based on direct labourhours. It is considering implementing an activitybased 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: Estilated Activity Measure Overhead Cost Expected Activity Machining Machinehours $231,666 11,666 MH Machine setups Number of setups $186,666 366 setups Product design Number of products $ 94,666 2 products General "Factory Direct labourhours $266,66613,266 DLHs [ Activity Measure Product Y Product I Machinehours 8,666 3,666 Number o-F setups 66 2116 Number o-F products 1 1 Direct labourhours ?,666 6,266 [
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