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Required information The Foundational 15 [LO7-1, LO7-3, LO7-4] [The following information applies to the questions displayed below.] Hickory Company manufactures two products14,000 units of Product

Required information

The Foundational 15 [LO7-1, LO7-3, LO7-4]

[The following information applies to the questions displayed below.]

Hickory Company manufactures two products14,000 units of Product Y and 6,000 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 $684,000 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:

Activity Cost Pool Activity Measure Estimated Overhead Cost Expected Activity
Machining Machine-hours $ 200,000 10,000 MHs
Machine setups Number of setups $ 100,000 200 setups
Product design Number of products $ 84,000 2 products
General factory Direct labor-hours $ 300,000 12,000 DLHs

Activity Measure Product Y Product Z
Machine-hours 7,000 3,000
Number of setups 50 150
Number of products 1 1
Direct labor-hours 8,000 4,000

5. What is the activity rate for the Product Design activity cost pool?

6. What is the activity rate for the General Factory activity cost pool?

9. 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?

11. Using the plant wide overhead rate, what percentage of the total overhead cost is allocated to Product Y and Product Z? (Round your "Percentage" answers to 1 decimal place.)

12. Using the ABC system, what percentage of the Machining costs is assigned to Product Y and Product Z?

13. Using the ABC system, what percentage of Machine Setups cost is assigned to Product Y and Product Z?

14. Using the ABC system, what percentage of the Product Design cost is assigned to Product Y and Product Z?

15. Using the ABC system, what percentage of the General Factory cost is assigned to Product Y and Product Z? (Round your "Percentage" answers to 1 decimal place.)

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