Question

Required information Greenwood 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 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 $ 227,700 $ 153,900 $ 91,000 $ 257,000 Expected Activity 11,000 MHS 2 70 setups 2 products 10,000 DLHS Product Y 8,700 Activity Measure Machining Number of setups Number of products Direct labor-hours Product Z 2,300 210 60 8,700 1,300 3. What is the activity rate for the Machining activity cost pool? (Round your answer to 2 decimal places.) Activity rate per MH

Answer 1

Answer is given below

Activity rate for Machining activity pool Machining Cost $227,700 $20.70 per MH Machine hours 11,000 Activity rate is arrived based on Activity Cost pool and Activty driver Machine hours Product Y Product z Total 8,700 2,300 11,000