Question
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 labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates all $571,200 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:
A. 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.)
B. 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.)
C. Using the ABC system, what percentage of the Product Design cost is assigned to Product Y and Product Z?
D. Using the ABC system, what percentage of the General Factory cost is assigned to Product Y and Product Z?
Estimated Overhead Expected Activity Activity Cost Pool Machining Machine setups Product design General factory Activity Measure Cost $ 210,100 11,000 MHs $ 45,100 Machine-hour:s Number of setups Number of products $ 75,000 Direct labor-hours 110 setups 2 products 241,000 13,200 DLHs Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Product YProduct Z 4,900 60 6,100 50 1 7,100 6,100Step by Step Solution
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