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 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:
Activity Measure | Estimated Overhead Cost | Expected Activity | ||||
Machining | Machine-hours | $ | 227,700 | 11,000 | MH | |
Machine setups | Number of setups | $ | 153,900 | 270 | setups | |
Product design | Number of products | $ | 91,000 | 2 | products | |
General factory | Direct labour-hours | $ | 257,000 | 13,200 | DLHs | |
Activity Measure | Product Y | Product Z | ||||
Machine-hours | 7,700 | 3,300 | ||||
Number of setups | 60 | 210 | ||||
Number of products | 1 | 1 | ||||
Direct labour-hours | 8,700 | 4,500 | ||||
Required:
What is the companys plantwide overhead rate? (Round your answer to 2 decimal places.)
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.)
What is the activity rate for the Machining activity cost pool? (Round your answer to 2 decimal places.)
What is the activity rate for the Machine Setups activity cost pool?
What is the activity rate for the Product Design activity cost pool?
Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Y? (Do not round intermediate calculations and round your final answer to the nearest dollar amount.)
Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Z? (Do not round intermediate calculations and round your final answer to the nearest dollar amount.)
Using the plantwide overhead rate, what percentage of the total overhead cost is allocated to Product Y and Product Z? (Round your intermediate calculations to 2 decimal places. Round your "Percentage" answers to 2 decimal places. (i.e. 0.1234 should be entered as 12.34).)
Using the ABC system, what percentage of the Machining costs is assigned to Product Y and Product Z? (Round your intermediate calculations to 2 decimal places. Round your "Percentage" answers to 2 decimal places. (i.e. 0.1234 should be entered as 12.34).)
Using the ABC system, what percentage of Machine Setups cost is assigned to Product Y and Product Z? (Round your intermediate calculations to 2 decimal places. Round your "Percentage" answers to 2 decimal places. (i.e. 0.1234 should be entered as 12.34).)
Using the ABC system, what percentage of the Product Design cost is assigned to Product Y and Product Z? (Round your answers to 2 decimal places.)
Using the ABC system, what percentage of the General Factory cost is assigned to Product Y and Product Z? (Round your intermediate calculations to 2 decimal places. Round your "Percentage" answers to 2 decimal places. (i.e. 0.1234 should be entered as 12.34).)
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