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:
|
Activity Cost Pool
|
Activity Measure
|
Estimated Overhead Cost
|
Expected Activity
|
|
Machining
|
Machine-hours
|
$
|
235,200
|
12,000
|
MHs
|
|
Machine setups
|
Number of setups
|
$
|
73,600
|
160
|
setups
|
|
Production design
|
Number of products
|
$
|
80,000
|
2
|
products
|
|
General factory
|
Direct labor-hours
|
$
|
295,200
|
14,400
|
DLHs
|
|
Activity Measure
|
Product Y
|
Product Z
|
|
Machine-hours
|
6,600
|
5,400
|
|
Number of setups
|
40
|
120
|
|
Number of products
|
1
|
1
|
|
Direct labor-hours
|
7,600
|
6,800
|
| |
1. What is the company's plant wide overhead rate?
2. Using the plant wide overhead rate, how much manufacturing overhead cost is allocated to Product Y and Product Z?
3. What is the activity rate for the Machining activity cost pool?
4. What is the activity rate for the Machining activity cost pool?
5. What is the activity rate for the Product Design activity cost pool?