Question

! Required information The Foundational 15 (Algo) (LO7-1, LO7-3, LO7-4] [The following information applies to the questions displayed below.) Hickory Company manufactures two products—15,000 units of Product Y and 7,000 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 $696,000 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 Product design General factory Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Estimated Overhead Cost Expected Activity $ 224,400 11,000 MHs $ 129,600 240 setups $ 88,000 2 products $ 254,000 13,200 DLHS Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Product Y Product Z 7,400 3,600 180 1 1 8,400 4,800 60

1. What is the company’s plantwide overhead rate?
2. Using the plantwide 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. Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Y?
8. Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Z?
9. Using the plantwide overhead rate, what percentage of the total overhead cost is allocated to Product Y and Product Z?
10. Using the ABC system, what percentage of the Machining costs is assigned to Product Y and Product Z?
11. Using the ABC system, what percentage of Machine Setups cost is assigned to Product Y and Product Z?
12. Using the ABC system, what percentage of the Product Design cost is assigned to Product Y and Product Z?
13. Using the ABC system, what percentage of the General Factory cost is assigned to Product Y and Product Z?

Answer 1

As HOMEWORKLIB Quideline, Only First 4 Sub parts for Each Question per post will be Answered. Post remaing questions as a Separate post. So But I Answered the first 6 Sub parts in the given Question

1)
Plantwide Overhead Rate            = Total Estimated overhead cost / Estimated Direct Labor hour            = ( $ 224,400 + $ 129,600 + 88,000 $ 254,000) / 13,200 DLH            =   $ 696,000 / 13,200 DLH            = $ 52.73 per DLH
Plantwide Overhead Rate    = $ 52.73 per DLH
2)
Particulars	Product Y	Product Z
Direct labor Hours (A)	8,400	3,600
Plant wide overhead rate (B)	$ 52.73	$ 52.73
Manufacturing overhead allocated (A x B )	$ 442,932	$ 189,828
3)
Activity rate for Machining activity Cost pool            = Estimated Overhead cost / Expected Machine hours            = $ 224,400 / 11,000 MHs	$ 20.4 per MH
4)
Activity rate for Machine setups activity Cost pool            = Estimated Overhead cost / Number of Machine setups            = $ 129,600 / 240	$ 540 per setup
5)
Activity rate for Product design activity Cost pool            = Estimated Overhead cost / Number of products            = $ 88,000 / 2 products	$ 44,000 per Product
6)
Activity rate for General factory activity Cost pool            = Estimated Overhead cost / Direct labor hours            = $ 254,000 / 13,200	$ 19.24 per DLH