Hickory Company manufactures two products—14,000 units of Product Y and 6,000 un
ID: 2417384 • Letter: H
Question
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 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:
11. Using the plantwide overhead rate, what percentage of the total overhead cost is allocated to Product Y and Product Z? (Round your intermediate calculations to 2 decimal places. Round your "Percentage" answers to 2 decimal places. (i.e. 0.1234 should be entered as 12.34).)
12. Using the ABC system, what percentage of the Machining costs is assigned to Product Y and Product Z? (Round your intermediate calculations to 2 decimal places. Round your "Percentage" answers to 2 decimal places. (i.e. 0.1234 should be entered as 12.34).)
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 "Percentage" answers to 2 decimal places. (i.e. 0.1234 should be entered as 12.34).)
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.)
15. Using the ABC system, what percentage of the General Factory cost is assigned to Product Y and Product Z? (Round your intermediate calculations to 2 decimal places. Round your "Percentage" answers to 2 decimal places. (i.e. 0.1234 should be entered as 12.34).)
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 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:
Explanation / Answer
11
Calculation of percentage of the total overhead cost is allocated to Product Y and Product Z:
(Using Plant wide overhead rate)
Product Y
Product Z
Total
Direct Labor Hours
9,500
2,500
12,000
Percentage of the total overhead cost Allocated
79.17%
20.83%
(9500/12000)
(2500/12000)
12
Calculation of percentage of the Machining costs is assigned to Product Y and Product Z:
(Using ABC System)
Product Y
Product Z
Total
Machine-hours
7,300
2,700
10,000
Percentage of the Machining costs is assigned
73.00%
27.00%
(7300/10000)
(2700/10000)
13
Calculation of percentage of Machine Setups cost assigned:
(Using ABC System)
Product Y
Product Z
Total
Number of setups
50
180
230
Percentage of Machine Setups cost assigned:
21.74%
78.26%
(50/230)
(180/230)
14
Calculation of percentage of the Product Design cost assigned:
(Using ABC System)
Product Y
Product Z
Total
Number of products
1
1
2
Percentage of the Product Design cost assigned:
50.00%
50.00%
(1/2)
(1/2)
15
Calculation of percentage of the General Factory cost assigned:
(Using ABC System)
Product Y
Product Z
Total
Direct Labor Hours
9,500
2,500
12,000
Percentage of the General Factory cost assigned
79.17%
20.83%
(9500/12000)
(2500/12000)
11
Calculation of percentage of the total overhead cost is allocated to Product Y and Product Z:
(Using Plant wide overhead rate)
Product Y
Product Z
Total
Direct Labor Hours
9,500
2,500
12,000
Percentage of the total overhead cost Allocated
79.17%
20.83%
(9500/12000)
(2500/12000)
12
Calculation of percentage of the Machining costs is assigned to Product Y and Product Z:
(Using ABC System)
Product Y
Product Z
Total
Machine-hours
7,300
2,700
10,000
Percentage of the Machining costs is assigned
73.00%
27.00%
(7300/10000)
(2700/10000)
13
Calculation of percentage of Machine Setups cost assigned:
(Using ABC System)
Product Y
Product Z
Total
Number of setups
50
180
230
Percentage of Machine Setups cost assigned:
21.74%
78.26%
(50/230)
(180/230)
14
Calculation of percentage of the Product Design cost assigned:
(Using ABC System)
Product Y
Product Z
Total
Number of products
1
1
2
Percentage of the Product Design cost assigned:
50.00%
50.00%
(1/2)
(1/2)
15
Calculation of percentage of the General Factory cost assigned:
(Using ABC System)
Product Y
Product Z
Total
Direct Labor Hours
9,500
2,500
12,000
Percentage of the General Factory cost assigned
79.17%
20.83%
(9500/12000)
(2500/12000)
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