Greenwood Company manufactures two products—14,000 units of Product Y and 6,000
ID: 412198 • 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 Measure Product Y Product Z
Machining 6,200 3,800
Number of setups 50 70
Number of products 1 1
Direct labor-hours 7,200 8,800
What is the company’s plantwide overhead rate? Per DLH
Using the plantwide overhead rate, how much manufacturing overhead cost is allocated to Product Y and Product Z? (Round your intermediate calculations to 2 decimal places and final answers to the nearest dollar amount.) Product Y Product Z
What is the activity rate for the Machining activity cost pool? PER MH (Round your answer to 2 decimal places.)
What is the activity rate for the Machine Setups activity cost pool? per set up (Round your answer to 2 decimal places.)
What is the activity rate for the Product Design activity cost pool? per product (Round your answer to 2 decimal places.)
What is the activity rate for the General Factory activity cost pool? Per DLH (Round your answer to 2 decimal places.)
What is the activity rate for the Machining activity cost pool? (Round your answer to 2 decimal places.)
Which of the four activities is a batch-level activity? Machining activity, General factory activity,
Machine setups activity
Which of the four activities is a product-level activity? Product design activity, General factory activity, Machine setups activity, or Machining activity
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.)
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.)
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 Machining Machine-hours $ 192,000 10,000 MHs Machine setups Number of setups $ 50,400 120 setups Production design Number of products $ 76,000 2 products General factory Direct labor-hours $ 387,200 16,000 DLHsActivity Measure Product Y Product Z
Machining 6,200 3,800
Number of setups 50 70
Number of products 1 1
Direct labor-hours 7,200 8,800
What is the company’s plantwide overhead rate? Per DLH
Using the plantwide overhead rate, how much manufacturing overhead cost is allocated to Product Y and Product Z? (Round your intermediate calculations to 2 decimal places and final answers to the nearest dollar amount.) Product Y Product Z
What is the activity rate for the Machining activity cost pool? PER MH (Round your answer to 2 decimal places.)
What is the activity rate for the Machine Setups activity cost pool? per set up (Round your answer to 2 decimal places.)
What is the activity rate for the Product Design activity cost pool? per product (Round your answer to 2 decimal places.)
What is the activity rate for the General Factory activity cost pool? Per DLH (Round your answer to 2 decimal places.)
Explanation / Answer
Cost Output Activity Cost Pool Activity Measure Estimated Overhead Cost Expected Activity Rate Cost/Total output Machining Machine-hours $ 192000 10,000 MHs 19.2 Machine setups Number of setups $ 50400 120 setups 420 Production design Number of products $ 76000 2 products 38000 General factory Direct labor-hours $ 387200 16,000 DLHs 24.2 $/DLH Ans 1 Plantwide OH rate Product Y Product Z Total DLH Units 14000 6000 20000 387200 DLH $2,71,040.00 $1,16,160.00 Ans 2 Cost Output Activity Cost Pool Activity Measure Estimated Overhead Cost Expected Activity Rate Cost/Total output Machining Machine-hours $ 192000 10,000 MHs 19.20 Per MH Ans 3 Machine setups Number of setups $ 50400 120 setups 420.00 Per Setups Ans 4 Production design Number of products $ 76000 2 products 38000.00 Per product Ans 5 General factory Direct labor-hours $ 387200 16,000 DLHs 24.20 $/DLH Ans 6 Rate*Resource Y Rate*Resource Z Activity measure Product Y Product Z Cost Y Cost Z Machine-hours 6200 3800 119040 72960 Number of setups 50 70 21000 29400 Number of products 1 1 38000 38000 Direct labor-hours 7200 8800 174240 212960 Total 352280 353320 Ans 7 Ans 8
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