Hickory Company manufactures two products-13,000 units of Product Y and 5.000 units of Product Z. The company
Question:
Hickory Company manufactures two products-13,000 units of Product Y and 5.000 units of Product Z. The company uses a plant wide 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 company?s plant wide overhead rate?
2. Using the plant wide overhead rate, how much manufacturing overhead cost is allocated to Product Y and Product Z?
3. What is the activity rate for the Machining activity cost pool?
4. What is the activity rate for the Machine Setups 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?
Managerial Accounting for Managers
ISBN: 978-1259578540
4th edition
Authors: Eric Noreen, Peter Brewer, Ray Garrison