Hickory Company manufactures two products—14,000 units of Product Y and 6,000 un

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:

  

  

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? (Round your answer to 2 decimal places.)
7.

Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Y? (Do not round intermediate calculations and round your final answer to the nearest dollar amount.)

Activity Cost Pool Activity Measure Estimated Overhead Cost Expected Activity   Machining Machine-hours $ 209,000    10,000 MHs   Machine setups Number of setups $ 171,100    290 setups   Production design Number of products $ 93,000    2 products   General factory Direct labor-hours $ 259,000    12,000 DLHs

Explanation / Answer

Hickory Company manufactures two products—14,000 units of Product Y and 6,000 un

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