Hckory Company manufactures two products-14,000 units of Product Y and 6,000 uni
ID: 2455262 • Letter: H
Question
Hckory Company manufactures two products-14,000 units of Product Y and 6,000 units of Product Z. The company uses a plantwide ove head rate based on direct labor-hors·REs considering implementing an actwtrbased costrng tABC) system lNet allocases all of its manufacturing overhead to four cost pools. The following edditional information is avalable for the company as a whole and for Proues Y and Z: Estimated Overhead Activity Cost Pool Machining Machine setups Production design General faciory Activity Measure Cost Expected Activity $200,000 10,000 MHs Number of setups Number of products Direct labor hours 100,000 200 setups S 84,000 $300,000 12,000 DLHs 2 products Activity Measure Product Y Product Z 7,000 3,000 150 Number of setups Number of products Direct labor hours 50 8,000 4,000 Required: What is the company's plantwide overhead rate? redetermined overhead rate per DLH 2· 10.00 points Required: Using the plantwide overhesd rate, how much manufacturing overhead cost is allocaled to Product Y and Product 27 Manulachuring overhead alocaled 3 10.00 points Required: What is the activity rate for the Machining activity cost pool? per MH 4. 10.00 points quiredi acivity equi What is the activity rato for the Machine Setups activity cost poo? per setup 5. 10.00 points, Required What is the activity rato for the Product Design activity cost pool?Explanation / Answer
Answer:1 Predetermined Overhead rate=Estimated total Overhead cost/Total direct labor hours
=($200000+$100000+$84000+$300000)/12000
=$684000/12000
=$57 per labor hours
Answer:2
Answer:3 Calculation of the activity rate per machining Activity cost pool:
Activity rate=Machine cost/Machine hours
=$200000/10000
=$20 per MH
Answer:4 Calculation of the activity rate per machining set up Activity cost pool:
Activity rate=Machine set up cost/Number of set ups
=$100000/200
=$500 per setup
Answer:5 Calculation of the activity rate for the product design Activity cost pool:
Activity rate=Product design cost/Number of products
=$84000/2 products
=$42000 per products
Answer:6 Calculation of the activity rate for general factory Activity cost pool:
Activity rate=General Factory cost/Direct labor hours
=$300000/12000
=$25 per DLH
Particulars Product Y Product Z Direct labor hours 8000 4000 Predetermined overhead rate 57 57 Manufacturing overhead allocated 456000 228000Related Questions
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