Question

Saved Required information [The following information applies to the questions displayed below Hickory Company manufactures two products-13,000 units of Product Y and 5.000 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 $829,500 of its manufacturing overhead to four cost pools. The following additional information s available for the company as a whole and for Products Y and 2 Estimated Overhead Activity Measure Activity Cost Pool Machining Machine setups Product design General factory Cost i Expected Activity Machine-hours Number of setups Number of products 5 246,000 12,00 MHs s 137,580 258 setups $ 89,000 2 products Direct lobor-hours s 357,000 14,00 OHs Product Y Product 2 Activity Measure Machine-hours Number of setups Number of products Direct labor-hours 7,588 40 4,5e0 210 8,s00 5,980 activity rate for the Machining activity cost pool? (Round your answer to 2 decimal places) per MH

Answer 1

Activity rate = Estimated overhead cost / Machine hours
= $246,000 / 12,000
= $20.50 per MH