Question

Hickory 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 12,000 DLHS Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Product Y 6,200 50 1 10,000 Product Z 3,800 70 1 2,000 value: 1.00 points Required information Required: Which of the four activities is a batch-level activity? General factory activity Machining activity Product design activity Machine setups activity

Answer 1

Answer) Machine setups activity Batch level activity refers to costs which are incurred each time batch or group of units is produced example machine setup,purchase orders etc.