Question

Hickory 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 $674,000 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	$	216,700	11,000	MHs
Machine setups	Number of setups	$	79,900	170	setups
Product design	Number of products	$	81,000	2	products
General factory	Direct labor-hours	$	296,400	13,200	DLHs

Activity Measure	Product Y	Product Z
Machine-hours	6,700	4,300
Number of setups	60	110
Number of products	1	1
Direct labor-hours	7,700	5,500
12. Using the ABC system, what percentage of the Machining costs is assigned to Product Y and Product Z? (Round your "Percentage" answers to 2 decimal places.)

Answer 1

Hickony company manufachire two products Activity Rate: machining $2,16700 - 11000 1907 MHS machine setup: $99900 10 4 510 pes set 3 Product Design: $ 810002 -> $ 40.500 produc . 9 Greneral factory: $296400 & 132.00 = $ 22.45 Pesoin using the ABC system, what percentage of the machining cost is assigned to product y ez ? machining cost: al product y: $ 19.7 PesmHS X 6700 Hour. S 131990 6 product 2: 4300 Hour. $19.7 pes mts X $ 684 % Assigned to product = Amount Allocated : TOTO cast 1 Y = $ 131990 & $216700 = 60.90% ] 2 2 = $ 8440 $216700 39.1%