Question

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	Activity Measure	Estimated Overhead Cost			Expected Activity
Machining	Machine-hours	$	203,000			10,000	MHs
Machine setups	Number of setups	$	121,900			230	setups
Production design	Number of products	$	87,000			2	products
General factory	Direct labor-hours	$	379,500			15,000	DLHs

Activity Measure	Product Y			Product Z
Machining		8,300			1,700
Number of setups		50			180
Number of products		1			1
Direct labor-hours		9,500			5,500

Required:

1. What is the company’s plantwide overhead rate? (Round your answer to 2 decimal places.)

2. Using the plantwide overhead rate, how much manufacturing overhead cost is allocated to Product Y and Product Z? (Round your intermediate calculations to 2 decimal places. Round your answers to the nearest dollar amount.)

3. What is the activity rate for the Machining activity cost pool? (Round your answer to 2 decimal places.)

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? (Round your answer to 2 decimal places.)

7. Which of the four activities is a batch-level activity?

• Machining activity

• General factory activity

• Product design activity

• Machine setups activity

8. Which of the four activities is a product-level activity?

• Machining activity

• Product design activity

• Machine setups activity

• General factory activity

9. Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Y? (Round your intermediate calculations to 2 decimal places. Round your answers to the nearest dollar amount.)

10. 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.)

11. Using the plantwide overhead rate, what percentage of the total overhead cost is allocated to Product Y and Product Z? (Round your intermediate calculations to 2 decimal places. Round your answers to 2 decimal places.)

12. Using the ABC system, what percentage of the Machining costs is assigned to Product Y and Product Z? (Round your intermediate calculations to 2 decimal places. Round your answers to 2 decimal places.)

13. Using the ABC system, what percentage of Machine Setups cost is assigned to Product Y and Product Z? (Round your intermediate calculations to 2 decimal places. Round your answers to 2 decimal places.)

4. Using the ABC system, what percentage of the Product Design cost is assigned to Product Y and Product Z? (Round your answers to 2 decimal places.)

15. Using the ABC system, what percentage of the General Factory cost is assigned to Product Y and Product Z? (Round your intermediate calculations and final answers to 2 decimal places.)

Answer 1

Answer: 1.) company's Planturide overhead Rate can be Calculated by dividing Total estimated Overhead by Total espected direct Labour hours Plantwide overhead Rate Total Estimated overhead Total Estimated Direct Labour hours 203000 + 121900 + 87000 + 379500 15000 hours $52.76 per hour. using the Planturide overhead Rate, manufacturing Overhead cost is allocated to Product 4 Productz Direct Labour hours 9500 5500 (x) Plantuido Overhead Rate X 52.76 x 52.76 Manufacturing overhead $501,220 assigned . $290,180

3.) Calculation of activity Rate of machining activity Cost Pood are as follows: $ 2030vo Machining Cost (²) Number of machine hours loooo Activity Rate per Machine hours $20.30 Calculation of activity Rate for Machine Selaps activity cost pool are as follows: Machine Setup Cost $121900 (+) Neember of seleeps + 230 Activity Rate per setup $530

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