Question

Required information 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 Machining Machine setups Production design General factory Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Estimated Overhead Cost $ 192,000 $ 50,400 $ 76,000 $ 387,200 Expected Activity 10,000 MHS 120 setups 2 products 16,000 DLHS Activity Measure Machining Number of setups Number of products Direct labor-hours Product Y 7,200 50 Product Z 2,800 70 7,200 8,800 0. Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Z? (Round your intermediate calculations to 2 decimal places. Round your answers to the nearest dollar amount.) Total manufacturing overhead cost

Answer 1

Calculation of per activity rate
Activity cost pool	Estimated Overhead	Expected Activity	Rate per activity
a	b	c	d=b/c
Machining	$                       1,92,000	10000 hours	$                                   19.20
Machine Setups	$                           50,400	120 setups	$                                 420.00
Product Design	$                           76,000	2 products	$                           38,000.00
General Factory	$                       3,87,200	16000 DLHs	$                                   24.20
Calculation of total manufacturing overhead to be assigned to the product Z
Activity cost pool	Number Of Activities	Rate per activity	Overhead Assigned
a	b	c	d=b*c
Machining	2800	$                          19.20	$                           53,760.00
Machine Setups	70	$                        420.00	$                           29,400.00
Product Design	1	$                  38,000.00	$                           38,000.00
General Factory	8800	$                          24.20	$                       2,12,960.00
Total			$                       3,34,120.00
Total Overhead Assigned to The Product Z = $334120