Question

A. what is the companys plantwide iverhead rate ?

B.how much manufacturing overhead is allocated to product Y and product Z?

C. what is the actuvity rate for the machining activity cost pool?

D.what is the activity rate for the machine setups activity cost pool?

E. what is the activity rate fir the product design activity cost pool?

F. what is the activity rate for the general factory cost pool?

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 $ 200,000 $ 100,000 $ 84,000 $ 300,000 Expected Activity 10,000 MHS 200 setups 2 products 12,000 DLHO Activity Measure Machining Number of setups Number of products Direct labor-hours Product Y 8,000 40 1 9,000 Product 2 2,000 160 2 3,000

Answer 1

A. Plant-wide overhead rate =Total Estimated overhead cost/Total direct Labour hours =$684,000 / 12,000 =$57 per labour hour B. Product Y =$57 per labour hours x 9,000 labour hours = $513,000 Product z =$57 per labour hours x 3,000 labour hours = $171,000 C. Activity Rate = Estimated Overhead Cost/ Estimated Activity Machining Cost pool =$200,000/ 10,000 machine hours = $20 per machine hours

D. Machine setups activity cost pool =$100,000/200 steps =$500 per machine setups E. Product Design Activity cost pool =$84,000 / 2 products =$42,000 per product F General Factory cost pool =300,000 / 12,000 direct labour hours = $25 per direct labour hours

Notes: 1 Total estimated overhead costs =$200,000+$100,000+$84,000+$300,000 =$684,000 2 Total direct labour hours =9,000+3,000 =12,000

Hope this solves your query. Feel free to ask any further query in the comment section.