Greenwood Company manufactures two products-15,000 units of Product Y and 7,000
ID: 2488168 • Letter: G
Question
Greenwood Company manufactures two products-15,000 units of Product Y and 7,000 units of Product Z. The company uses a pj&S;&Kj;^S 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: 1. What is the activity rate for the General Factory activity- cost pool 2. Which of the four activities is a batch-level activity? a. Machining activity b. General factory activity c. Product design activity d. Machine setups activity 3. Which of the four activities is a product level activity? a. Product design activity b. Machine setups activity c. Machining activity d. General factory activity 4. Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Y? 5. Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Z?Explanation / Answer
1 Company's plantwideoverhead rate = tota overhead/ total labour hrs =$664200/10000 dlh 66.42 $/hr 2 D . Machine set up activity is batch level activity 3 A, Product Desing Activity is product level activity 4,5 Overhead Amount Expexted Activity Measure Overhead /activiy Machining $221,100 11000 MHs 20.1 $/MH Machine Set up $107,100 210 Set up 510 $/set up Production design $85,000 2 product 42500 $/product general Factory $251,000 10000 DLH 25.1 $/DLH $664,200 Total Manufacturing Overhead Overhead /activiy Product Y Product Z Activity Cost[Activity*Cost per activity] Activity Cost[Activity*Cost per activity] Machining 20.1 $/MH 7100 142710 3900 78390 Machine Set up 510 $/set up 60 30600 150 76500 Production design 42500 $/product 1 42500 1 42500 general Factory 25.1 $/DLH 8100 203310 1900 47690 TOTAL OVERHEAD 419120 245080
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