Greenwood Company manufactures two products—14,000 units of Product Y and 6,000
ID: 2563049 • 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:
1. Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Y? (Round your intermediate calculations to 2 decimal places and final answer to the nearest dollar amount.) Total Manufacturing Overhead Cost________
2. Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Z? (Round your intermediate calculations to 2 decimal places and final answer to the nearest dollar amount.) Total manufacturing Overhead Cost ________
3. Using the plantwide overhead rate, what percentage of the total overhead cost is allocated to Product Y and Product Z? (Round your answers to 2 decimal places.) Total Overhead Cost Product Y___% Product Z____%
4. Using the ABC system, what percentage of the Machining costs is assigned to Product Y and Product Z? (Round your answers to 2 decimal places.) Matching Cost Product Y_____% Product Z_____%
5. Using the ABC system, what percentage of Machine Setups cost is assigned to Product Y and Product Z? (Round your answers to 2 decimal places.) Machine Setups Costs Product Y_____% Product Z______%
6. 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.) Product design cost Product Y___% Product Z____%
7. Using the ABC system, what percentage of the General Factory cost is assigned to Product Y and Product Z? (Round your answers to 2 decimal places.) General Factory cost Product Y_____% Product Z____%
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:
Explanation / Answer
Product Y Product Z Activity Cost Pool Activity Measure Estimated Overhead Cost Expected Activity Cost per activity Number of activity Total costs Number of activity Total costs Machining Machine-hours 2,06,000 10,000 20.6 7600 156560 2400 49440 Machine setups Number of setups 1,45,600 260 560 50 28000 210 117600 Production design Number of products 90,000 2 45000 1 45000 1 45000 General factory Direct labor-hours 3,07,200 12,000 25.6 8600 220160 3400 87040 Total 7,48,800 4,49,720 2,99,080 1) Total manufacturing overhead cost would be assigned to Product Y = $449720 2) Total manufacturing overhead cost would be assigned to Product X = $299080 3) Percentage of the total overhead cost is allocated to Product Y using plantwide overhead rate = 8600/12000 = 71.67% Percentage of the total overhead cost is allocated to Product Z using plantwide overhead rate = 3400/12000 = 28.33% 4) percentage of the Machining costs is assigned to Product Y using ABC system = 7600/1000 = 76% percentage of the Machining costs is assigned to Product Z using ABC system = 2400/1000 = 24% 5) Percentage of Machine Setups cost is assigned to Product Y using ABC system = 50/260 = 19.23% Percentage of Machine Setups cost is assigned to Product Z using ABC system = 210/260 = 80.77% 6) Percentage of the Product Design cost is assigned to Product Y using ABC system = 1/2 = 50% Percentage of the Product Design cost is assigned to Product Z using ABC system = 1/2 = 50% 7) Percentage of the General Factory cost is assigned to Product Y using ABC system = 8600/12000 = 71.67% Percentage of the General Factory cost is assigned to Product Z using ABC system = 3400/12000 = 28.33%
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