Greenwood Company manufactures two products—15,000 units of Product Y and 7,000
ID: 2391323 • Letter: G
Question
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:
Using the plantwide overhead rate, how much manufacturing overhead cost is allocated to Product Y and Product Z? (Round your intermediate calculations to 2 decimal places and final answers to the nearest dollar amount.)
What is the activity rate for the Machining activity cost pool? (Round your answer to 2 decimal places.)
What is the activity rate for the Machine Setups activity cost pool? (Round your answer to 2 decimal places.)
What is the activity rate for the Product Design activity cost pool? (Round your answer to 2 decimal places.)
What is the activity rate for the General Factory activity cost pool? (Round your answer to 2 decimal places.)
Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Y? (Round your intermediate calculations to 2 decimal places and final answer to the nearest dollar amount.)
Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Z? (Round your intermediate calculations to 2 decimal places and final answer to the nearest dollar amount.)
Using the plantwide overhead rate, what percentage of the total overhead cost is allocated to Product Y and Product Z? (Round your answers to 2 decimal places.)
Using the ABC system, what percentage of the Machining costs is assigned to Product Y and Product Z? (Round your answers to 2 decimal places.)
Using the ABC system, what percentage of Machine Setups cost is assigned to Product Y and Product Z? (Round your answers to 2 decimal places.)
Using the ABC system, what percentage of the Product Design cost is assigned to Product Y and Product Z? (Round your answers to 2 decimal places.)
Using the ABC system, what percentage of the General Factory cost is assigned to Product Y and Product Z? (Round your answers to 2 decimal places.)
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:
Explanation / Answer
1. The company’s plantwide overhead rate = Total Estimated Overhead Cost / Total Direct Labor Hours
= $ 597,000 / 10,000 Direct Labor Hours
= $ 59.70 Per Direct Labor Hour
Hence the correct answer is $ 59.70 per Direct Labor Hour
2. The manufacturing overhead cost is allocated to Product Y = plantwide overhead rate *Number of Direct Labor Hours for Product Y
= $ 59.70 * 7,400 Direct Labor Hours
= $ 441,780
The manufacturing overhead cost is allocated to Product Z= plantwide overhead rate *Number of Direct Labor Hours for Product Z
= $ 59.70* 2,600 Direct Labor Hours
= $ 155,220
Hence the correct answer is $ 441,780 and $ 155,220
3. The he activity rate for the Machining activity cost pool = Total Estimated Overhead Cost for Machining / Total Machine-hours
= $ 213,400 /11,000 Machine Hours
= $ 19.40 Per Machine Hour
Hence, the correct answer is $ 19.40 Per Machine Hour
4. The activity rate for the Machine Setups activity cost pool = Total Estimated Overhead Cost for Machine Setups / Number of setups
= $ 61,600 / 140 Setups
= $ 440 Per Setup
Hence, the correct answer is $ 440 Per Setup
Note:
1. Calculation of Total Estimated Overhead Cost:
Activity Cost Pool Activity Measure Estimated Overhead Cost Machining Machine-hours $ 213,400 Machine setups Number of setups $ 61,600 Production design Number of products $ 78,000 General factory Direct labor-hours $ 244,000 Total Estimated Overhead Cost 597,000Related Questions
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