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?

Transcribed Image Text:

Activity Cost Pool Machining Machine setups Production design General factory Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Estimated Overhead Cost 235,200 $ $ 73,600 $ 80,000 $295,200 Expected Activity 12,000 MHS 160 setups 2 products 14,400 DLHS Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Product Y 6,600 40 1 7,600 Product Z 5,400 120 1 6,800 Activity Cost Pool Machining Machine setups Production design General factory Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Estimated Overhead Cost 235,200 $ $ 73,600 $ 80,000 $295,200 Expected Activity 12,000 MHS 160 setups 2 products 14,400 DLHS Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Product Y 6,600 40 1 7,600 Product Z 5,400 120 1 6,800

Answer rating: 100% (QA)

1 Plant wise overhead rate Total overhead cost Direct labor hours 235200 73600 80000 295200 1... View the full answer