Question: Using the ABC system how much total manufacturing overhead cost would be assigned to product why? Using the plant wide overhead rate what percentage of
Hickory Company manufactures two products 13,000 units of Product Y and 5,000 units of Product 2 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 Machining Machine setups Production design General factory Estimated Activity Measure Overhead Cost Expected Activity Machine hours $ 242.400 12,000 MHS Number of setups $ 114,400 220 setups Number of products $ 86,000 2 products Direct labor-hours $ 302.400 14.400 DLHS Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Product Y 7.200 40 1 8,200 Product Z 4.800 180 1 6.200
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