Question
The 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.
The 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
14. 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.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started