1. What is the company’s plantwide overhead rate? 2. Using the plantwide overhea
ID: 2415207 • Letter: 1
Question
1. What is the company’s plantwide overhead rate?
2. Using the plantwide overhead rate, how much manufacturing overhead cost is allocated to Product Y and Product Z?
3. What is the activity rate for the Machining activity cost pool?
4. What is the activity rate for the Machine Setups activity cost pool?
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 plantwide overhead rate, what percentage of the total overhead cost is allocated to Product Y and Product Z?
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?
Hickory Company manufactures two products-14,000 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 consldering Implementing an activity-based costing (ABC) system that allocates all of its manufacturlng overhead to four cost pools. The following additional Informatlon is avallable for the company as a whole and for Products Y and Z: Estlmated Overhead Activity Cost Pool Machining Machine setups Production design General factony Cost Expected Activity $209,000 0,000 MHs $ 171,100 $93,000 $259,000 2.000 DLHs Activity Measure Machlne-hours Number of setups Number of products Direct labor-hours 290 setups 2 products Activity Measure Product Y Product Z 7,900 2,100 240 Machine-hours Number of setups Number of products Direct labor-hours 50 8,900 3,100Explanation / Answer
calculation of activity rates
calculations of products cost
1)plant wide overhead rate
product y = $ 434,198.7/14,000=$ 31.01
product z= $ 298,897.3/6,000= 49.82
2 to 13 question solutions are getting used by above prepared tables
activity cost pool activity measure estimated overhead cost expected activity activity rate machining machine hours $ 209,000 10,000 mhz $ 20.9 machining set ups number set of hours $ 171,100 290 set ups $ 590 production design number of products $ 93,000 2 products $ 46,500 general factory dierct labour hours $ 259,000 12,000 dlhs $ 21.583
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