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: Estimated Overhead Expected Activity Activity Cost Pool Machining Machine setups Production design General factory Activity Measure Machine-hours Number of setups Cost 227,700 $153,900 91,000 257,000 11,000 MHs 270 setups 2 products 10,e00 DLHS Number of products Direct labor-hours Activity Measure Machining Product Y Product Z 2,300 210 1 1,300 8,700 Number of setups 60 Number of products 1 Direct labor-hours 8,700 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.) Product Y Product Z Total overhead cost

Answer 1

Activity cost pool	overhead cost	overhead rate	Product Y	Product Z
machining	2,27,700	20.7	8700 x 20.7 = 180,090	2300 x 20.7 = 47,610
machine setup	1,53,900	570	60 x 570 = 34,200	210 x 570 = 119,700
production design	91,000	45500	45,500	45,500
general factory	2,57,000	25.7	8700 x 25.7 = 223,590	1300 x 25.7 = 33,410
total	7,29,600		4,83,380	2,46,220
total overhead percentage	100%		66.25%	33.75%