Question
The 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
The 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 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 PoolActivity MeasureEstimated Overhead CostExpected
ActivityMachiningMachine-hours$203,00010,000MHsMachine setupsNumber of setups$121,900230setupsProduction designNumber of products$87,0002productsGeneral factoryDirect labor-hours$379,50015,000DLHs
Activity MeasureProduct YProduct ZMachining8,3001,700Number of setups50180Number of products11Direct labor-hours9,5005,500
13. 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 answers to 2 decimal places.)
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