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LOT1. [OT3. Lin-4 Hickory Company manufactures two products14.000 units of Product '1' and will] units of Product 2.. The company uses a plantwide overhead rate based on direct labor-hours. [t is con- sidering implementing an activity-based costing {ABC} system that allocates all $684,111] of its manufacturing overhead to four cost prmls. The following additional information is available for the company as a whole and for Products Y and Z: Btlmeted Activity Cost Pool Acthrity Measure Overhead Cost Expected Acthtity Machinlng _ . _. _. __ . .1 _. __ Machine-hours $200,000 10,000 MHs Machine setups .......... Number of setups $100,000 200 setups Product design .. .. . .. .. . . Numberofproducts $34,000 2 products General factory .. .. . .. .. . . Direct labor-hours $300900 12.000 DLHs Activity-Based Costing: A Tool to Aid Decision Making 341 Activity Measure Product Y Product 2 Machine-hours ........... 1000 3.000 Number of setups ......... 50 1 50 Number of products ...... 1 I Direct labor-hours ........ 3.000 4.000 Required 1. What is the company's plantwide overhead rate? Using the plantwide overhead rate, hovtr much manufacturing overhead cost is allocated to Product Y'.' How much is allocated to Product 2.? What is the activity rate for the Machining activity cost pool? What is the activity rate for the Machine Setups activity cost pool? What is the activity rate for the Product Design activity cost pool? What is the activity rate for the General Factory activity cost pool'}I Which of the four activities is a batch-level activity? Why? Which of the four activities is a productlevel activity? Why\"? Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Y'? 10. Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Z? ll. Using the plantwide overhead rate1 what percentage of the total overhead cost is allocated to Product 't'? What percentage is allocated to Product Z? 12. Using the ABC system. what percentage of the Machining costs is assigned to Product Y? What percentage is assigned to Product 2'? Are these percentages similar to those obtained in requirement ll? Why?l 13. Using the ABC system. what percentage of Machine Setups cost is assigned to Product '1\"? What percentage is assigned to Product Z? Are these percentages similar to those obtained in requirement 1 1'? Why? 14. Using the ABC system, what percentage of the Product Design cost is assigned to Product Y? What percentage is assigned to Product Z? Are these percentages similar to those obtained in requirement ll? Why? 15. Using the ABC system. what percentage of the General Factory ccstis assigned to Product 't'? What percentage is assigned to Product 2'? Are these percentages similar to those obtained in requirement 11? Why? t4 laPPHPP'Pl-'l