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 |
15. Using the ABC system, what percentage of the General Factory cost is assigned to Product Y and Product Z? (Round your "Percentage" answers to 2 decimal place.)
Ans. 15 | Percentage of General factory cost assigned = Assigned overhead cost / Total overhead cost * 100 | |||||
Product Y | $172,900 / $296,400 * 100 | 58.33% | ||||
Product Z | $123,500 / $296,400 * 100 | 41.67% | ||||
*WORKING NOTES: | ||||||
*Calculations for Activity rate: | ||||||
Activity | Overhead cost | Expected activity | Activiy rate | |||
( A) | (B) | (A / B) | ||||
General factory | $296,400 | 13200 | $22 | Per direct labor hour | ||
*Calculations for overhead cost assigned: | ||||||
Product Y | Product Z | |||||
Activity rate (a) | Actual activity (b) | Overhead assigned (a*b) | Actual activity © | Overhead assigned (a*c) | ||
General factory | $22 per direct labor hour | 7700 | $172,900 | 5500 | $123,500 | |
Hickory Company manufactures two products—15,000 units of Product Y and 7,000 units of Product Z. The...
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...
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...
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...
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 $571,200 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 Product design General factory Activity Measure Machine-hours Number of...
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 $664,200 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 Cost $ 221,108 11,000 MHs $107,100 $ 85,000 $ 251, 000 13,200 DLHS...
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 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. (The total estimated overhead cost may not agree with the sum of allocated overhead costs to...
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 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: (The total estimated overhead cost may not agree with the sum of allocated overhead costs to...
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 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 2. (The total estimated overhead cost may not agree with the sum of allocated overhead costs to...
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