Greenwood Company manufactures two products – 14,000 units of Product Y and 6,00
ID: 2470656 • Letter: G
Question
Greenwood 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.
Activity Cost Pool Activity Measure Estimated Overhead Cost Expected Activity Matching Machine-hours $ 200,000 10,000 MHs Machine setups Number of setups 100,000 200 setups Production design Number of products 84,000 2 products General factory Direct labor-hours 300,000 12,000 DLHs
Activity Measure Product Y Product Z Machining 8,000 2,000 Number of setups 40 160 Number of products 1 1 Direct labor-hours 9,000 3,000
Using the ABC system, what percentage of the Machining costs is assigned to Product Y? What percentage is assigned to Product Z? Are these percentages similar to those obtained in question 11? Why?
Greenwood 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.
Activity Cost Pool Activity Measure Estimated Overhead Cost Expected Activity Matching Machine-hours $ 200,000 10,000 MHs Machine setups Number of setups 100,000 200 setups Production design Number of products 84,000 2 products General factory Direct labor-hours 300,000 12,000 DLHs
Activity Measure Product Y Product Z Machining 8,000 2,000 Number of setups 40 160 Number of products 1 1 Direct labor-hours 9,000 3,000
Using the ABC system, what percentage of the Machining costs is assigned to Product Y? What percentage is assigned to Product Z? Are these percentages similar to those obtained in question 11? Why?
Greenwood 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.
Activity Cost Pool Activity Measure Estimated Overhead Cost Expected Activity Matching Machine-hours $ 200,000 10,000 MHs Machine setups Number of setups 100,000 200 setups Production design Number of products 84,000 2 products General factory Direct labor-hours 300,000 12,000 DLHs
Activity Measure Product Y Product Z Machining 8,000 2,000 Number of setups 40 160 Number of products 1 1 Direct labor-hours 9,000 3,000
Greenwood 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.
Activity Cost Pool Activity Measure Estimated Overhead Cost Expected Activity Matching Machine-hours $ 200,000 10,000 MHs Machine setups Number of setups 100,000 200 setups Production design Number of products 84,000 2 products General factory Direct labor-hours 300,000 12,000 DLHs
Activity Measure Product Y Product Z Machining 8,000 2,000 Number of setups 40 160 Number of products 1 1 Direct labor-hours 9,000 3,000
Using the ABC system, what percentage of the Machining costs is assigned to Product Y? What percentage is assigned to Product Z? Are these percentages similar to those obtained in question 11? Why?
Explanation / Answer
product Y product Z Total machining g cost 160000 40000 200000
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