Hickory Company manufactures two products—13,000 units of Product Y and 5,000 un

Question

Hickory Company manufactures two products—13,000 units of Product Y and 5,000 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:

1. Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Y?(Do not round intermediate calculations and round your final answer to the nearest dollar amount.)

2. Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Z? (Do not round intermediate calculations and round your final answer to the nearest dollar amount.)

3. 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 "Percentage" answers to 2 decimal places. (i.e. 0.1234 should be entered as 12.34).)

4. Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Y?(Do not round intermediate calculations and round your final answer to the nearest dollar amount.)

5. Using the ABC system, what percentage of the Machining costs is assigned to Product Y and Product Z?(Round your intermediate calculations to 2 decimal places. Round your "Percentage" answers to 2 decimal places. (i.e. 0.1234 should be entered as 12.34).)

5. Using the ABC system, what percentage of Machine Setups cost is assigned to Product Y and Product Z?(Round your intermediate calculations to 2 decimal places. Round your "Percentage" answers to 2 decimal places. (i.e. 0.1234 should be entered as 12.34).)

6. 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.)

7. Using the ABC system, what percentage of the General Factory cost is assigned to Product Y and Product Z? (Round your intermediate calculations to 2 decimal places. Round your "Percentage" answers to 2 decimal places. (i.e. 0.1234 should be entered as 12.34).)

Hickory Company manufactures two products—13,000 units of Product Y and 5,000 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 381440 2 363760 3 plant rate = 745200/14400 51.75 Percentage Y Z Y Z 424350 320850 56.94% 43.06% 4 same as ans 1 = $381440 5 60.00% 40.00% 5 18.18% 81.82% 6 50.00% 50.00% 7 56.94% 43.06% Percentage Activity Cost Pool Activity Measure Estimated Overhead Cost Expected Activity rate per unit of driver Y Z Total Y Z   Machining Machine-hours $ 242400 12,000 MHs 20.2 145440 96960 242400 60.00% 40.00%   Machine setups Number of setups $ 114400 220 setups 520 20800 93600 114400 18.18% 81.82%   Production design Number of products $ 86000 2 products 43000 43000 43000 86000 50.00% 50.00%   General factory Direct labor-hours $ 302400 14,400 DLHs 21 172200 130200 302400 56.94% 43.06% total 745200 381440 363760

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