Greenwood Company manufactures two products: 14,000 units of Product Y and 6,000 units of Product Z. The
Question:
Greenwood Company manufactures two products: 14,000 units of Product Y and 6,000 units of Product Z. The company uses a plant-wide overhead rate based on direct labor hours. You are considering implementing an activity-based costing (ABC) system that assigns all your 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 | ps | 209,000 | 10,000 | MH |
machine configurations | Number of configurations | ps | 171,100 | 290 | settings |
Production design | Number of products | ps | 93,000 | 2 | products |
general factory | Direct labor hours | ps | 259,000 | 10,000 | DEBT |
activity measure | Product Y | Product Z |
machining | 7,900 | 2100 |
Number of configurations | 50 | 240 |
Number of products | 1 | 1 |
Direct labor hours | 8,900 | 1,100 |
1. | What is the company's plant-wide overhead rate? Default overhead rate? by DLH $ |
2. | Using the plant-wide overhead rate, how much manufacturing overhead is allocated to Product Y and Product Z? (Has manufacturing overhead been allocated? ) |
3. | What is the activity rate for the Machining activity cost pool? |
4. | What is the activity rate for the Machine Setup activity cost pool? |
5. | What is the activity rate for the product design activity cost pool? |
6. | What is the activity rate for the general factory activity cost pool? |
7. | Which of the four activities is a batch level activity? | ||||||||
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8. | Which of the four activities is a product level activity? | ||||||||
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9. | Using the ABC system, how much total manufacturing overhead cost would be allocated to Product Y? (Round your intermediate calculations to 2 decimal places and your final answer to the nearest dollar amount.) Total cost of manufacturing overhead? |
10 | Using the ABC system, how much total manufacturing overhead cost would be allocated to Product Z? (Round your intermediate calculations to 2 decimal places and your final answer to the nearest dollar amount.) Total cost of manufacturing overhead? |
11 | Using the plant-wide 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%: |
12 | Using the ABC system, what percentage of the Machining costs is allocated to Product Y and Product Z? (Round your answers to 2 decimal places.) machining cost? Product Y%: Product Z%: |
13 | Using the ABC system, what percentage of the machine setup cost is allocated to product Y and product Z? (Round your answers to 2 decimal places.) Do machine setups cost? Product Y: % Product Z: % |
14 | Using the ABC system, what percentage of the product design cost is allocated to product Y and product Z? (Round your answers to 2 decimal places.) Product design cost? Product Y: % Product Z: % |
15. | Using the ABC system, what percentage of the factory overhead cost is allocated to Product Y and Product Z? (Round your answers to 2 decimal places.) |
factory overhead cost? Product Y: % Product Z: % |
Introduction to Managerial Accounting
ISBN: 978-0078025792
7th edition
Authors: Peter Brewer, Ray Garrison, Eric Noreen