Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing A Quickstudy Reference Tool

Authors: Michael P Griffin

1st Edition

1423236408, 978-1423236405

More Books

Students also viewed these Accounting questions

Question

What is P{T1 Answered: 1 week ago

Answered: 1 week ago

Question

Distinguish between poor and good positive and neutral messages.

Answered: 1 week ago

Question

Describe the four specific guidelines for using the direct plan.

Answered: 1 week ago