Foundational
Greenwood Company manufactures two products-14,000 units of Product Y and 6,000 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 PoolActivity MeasureEstimated Overhead CostExpected Activity Machining Machine-hours$200,000 10,000 MHs Machine setups Number of setups$100,000 200 setups Production design Number of products$84,000 2 products General factory Direct labor-hours$300,000 12,000 DLHs
Activity MeasureProduct YProduct Z Machining8,000 2,000 Number of setups40 160 Number of products1 1 Direct labor-hours9,000 3,000
References
Section BreakFoundational [LO3-1, LO3-2, LO3-3, LO3-4]
Required:
1.What is the company's plantwide overhead rate?
2.Using the plantwide 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 Machine Setups activity cost pool?
5.What is the activity rate for the Product Design activity cost pool?
6.What is the activity rate for the General Factory activity cost pool?
7.Which of the four activities is a batch-level activity? Machine setups activity References
8.Which of the four activities is a product-level activity? Product design activity References
9.Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Y?
10. Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Z?
11.Using the plantwide overhead rate, what percentage of the total overhead cost is allocated to Product Y and Product Z?
12.Using the ABC system, what percentage of the Machining costs is assigned to Product Y and Product Z?
13.Using the ABC system, what percentage of Machine Setups cost is assigned to Product Y and Product Z?
14.Using the ABC system, what percentage of the Product Design cost is assigned to Product Y and Product Z?
15.Using the ABC system, what percentage of the General Factory cost is assigned to Product Y and Product Z?