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 Machining Machine setups Product design General factory Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Foundational 7-13 (Algo) Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Product Y 6,700 Machine setups cost 60 1 7,700 Estimated Overhead Cost $216,700 $ 79,900 $ 81,000 $ 296,400 Product Y 35.36 % Product Z 4,300 110 5,500 X Answer is complete but not entirely correct. Product Z Expected Activity 11,000 MHs 13. Using the ABC system, what percentage of Machine Setups cost is assigned to Product Y and Product Z? Note: Round intermediate calculations to 2 decimal places. Round your "Percentage" answers to 2 decimal places. 64.64 % 170 setups 2 products 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 $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 Machining Machine setups Product design General factory Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Foundational 7-13 (Algo) Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Product Y 6,700 Machine setups cost 60 1 7,700 Estimated Overhead Cost $216,700 $ 79,900 $ 81,000 $ 296,400 Product Y 35.36 % Product Z 4,300 110 5,500 X Answer is complete but not entirely correct. Product Z Expected Activity 11,000 MHs 13. Using the ABC system, what percentage of Machine Setups cost is assigned to Product Y and Product Z? Note: Round intermediate calculations to 2 decimal places. Round your "Percentage" answers to 2 decimal places. 64.64 % 170 setups 2 products 13,200 DLHs

Name: !Required informationThe Foundational 15 (Algo) [LO7-1, L07-3, LO07-4
Uploaded: 2024-03-20T06:32:49.000Z
Channel: Bartleby
Description: !Required informationThe Foundational 15 (Algo) [LO7-1, L07-3, LO07-4][The following information applies to the questions displayed below.]Hickory Company manufactures two products-15,000 units of Product Y and 7,000 units of Product Z. The company

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

Problem 1PA: The following product Costs are available for Haworth Company on the production of chairs: direct...

See similar textbooks

Similar questions

Plata Company has identified the following overhead activities, costs, and activity drivers for the coming year: Plata produces two models of microwave ovens with the following activity demands: The companys normal activity is 21,000 machine hours. Calculate the total overhead cost that would be assigned to Model X using an activity-based costing system: a. 230,000 b. 240,000 c. 280,000 d. 190,000
The following product costs are available for Stellis Company on the production of erasers: direct materials, $22,000; direct labor, $35,000; manufacturing overhead, $17,500; selling expenses, $17,600; and administrative expenses; $13,400. What are the prime costs? What are the conversion costs? What is the total product cost? What is the total period cost? If 13,750 equivalent units are produced, what is the equivalent material cost per unit? If 17,500 equivalent units are produced, what is the equivalent conversion cost per unit?
Evans, Inc., has a unit-based costing system. Evanss Miami plant produces 10 different electronic products. The demand for each product is about the same. Although they differ in complexity, each product uses about the same labor time and materials. The plant has used direct labor hours for years to assign overhead to products. To help design engineers understand the assumed cost relationships, the Cost Accounting Department developed the following cost equation. (The equation describes the relationship between total manufacturing costs and direct labor hours; the equation is supported by a coefficient of determination of 60 percent.) Y=5,000,000+30X,whereX=directlaborhours The variable rate of 30 is broken down as follows: Because of competitive pressures, product engineering was given the charge to redesign products to reduce the total cost of manufacturing. Using the above cost relationships, product engineering adopted the strategy of redesigning to reduce direct labor content. As each design was completed, an engineering change order was cut, triggering a series of events such as design approval, vendor selection, bill of materials update, redrawing of schematic, test runs, changes in setup procedures, development of new inspection procedures, and so on. After one year of design changes, the normal volume of direct labor was reduced from 250,000 hours to 200,000 hours, with the same number of products being produced. Although each product differs in its labor content, the redesign efforts reduced the labor content for all products. On average, the labor content per unit of product dropped from 1.25 hours per unit to one hour per unit. Fixed overhead, however, increased from 5,000,000 to 6,600,000 per year. Suppose that a consultant was hired to explain the increase in fixed overhead costs. The consultants study revealed that the 30 per hour rate captured the unit-level variable costs; however, the cost behavior of other activities was quite different. For example, setting up equipment is a step-fixed cost, where each step is 2,000 setup hours, costing 90,000. The study also revealed that the cost of receiving goods is a function of the number of different components. This activity has a variable cost of 2,000 per component type and a fixed cost that follows a step-cost pattern. The step is defined by 20 components with a cost of 50,000 per step. Assume also that the consultant indicated that the design adopted by the engineers increased the demand for setups from 20,000 setup hours to 40,000 setup hours and the number of different components from 100 to 250. The demand for other non-unit-level activities remained unchanged. The consultant also recommended that management take a look at a rejected design for its products. This rejected design increased direct labor content from 250,000 hours to 260,000 hours, decreased the demand for setups from 20,000 hours to 10,000 hours, and decreased the demand for purchasing from 100 component types to 75 component types, while the demand for all other activities remained unchanged. Required: 1. Using normal volume, compute the manufacturing cost per labor hour before the year of design changes. What is the cost per unit of an average product? 2. Using normal volume after the one year of design changes, compute the manufacturing cost per hour. What is the cost per unit of an average product? 3. Before considering the consultants study, what do you think is the most likely explanation for the failure of the design changes to reduce manufacturing costs? Now use the information from the consultants study to explain the increase in the average cost per unit of product. What changes would you suggest to improve Evanss efforts to reduce costs? 4. Explain why the consultant recommended a second look at a rejected design. Provide computational support. What does this tell you about the strategic importance of cost management?
The following product costs are available for Kellee Company on the production of eyeglass frames: direct materials, $32,125; direct labor, $23.50; manufacturing overhead, applied at 225% of direct labor cost; selling expenses, $22,225; and administrative expenses, $31,125. The direct labor hours worked for the month are 3,200 hours. A. What are the prime costs? B. What are the conversion costs? C. What is the total product cost? D. What is the total period cost? E. If 6.425 equivalent units are produced, what is the equivalent material cost per unit? F. What is the equivalent conversion cost per unit?
Required information [The following information applies to the questions displayed below.] 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 setups Number of products Direct labor-hours Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Estimated Overhead Product Y Product Z 6,100 50 4,900 60 1 1 7,100 6,100 Cost $ 210,100 Expected Activity 11,000 MHS 110 setups $ 45,100 $ 75,000 $241,000 2 products 13,200 DLHS 9. Using the ABC system, how much total manufacturing overhead…
! Required information Foundational (Algo) [LO4-1, LO4-2, LO4-3, LO4-4] 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: Activity Cost Pool Machining Machine setups Production design General factory Activity Measure Machining Number of setups Number of products Direct labor-hours Foundational 4-3 (Algo) Activity Measure Machine-hours. Number of setups Number of products Direct labor-hours Activity rate Product Y 7,100 60 1 7,100 per MH Estimated Overhead Cost $ 210,100 $ 45,100 $ 75,000 $ 241,000 Product Z 3,900 50 1 2,900 Expected Activity 11,000 MHS 110 setups 2 products 3. What is the activity rate for the Machining activity…
! Required information [The following information applies to the questions displayed below.] 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 $597,000 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 Machining Machine setups Product design General factory Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Estimated Overhead Product Y Product Z 6,400 4,600 60 80 1 1 7,400 5,800 7. Which of the four activities is a batch-level activity? Cost $ 213,400 $ 61,600 $ 78,000 $ 244,000 Expected Activity 11,000 MHS 140 setups 2 products 13,200 DLHS
! Required information [The following information applies to the questions displayed below.] 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 labour-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: Machining Machine setups Product design. General factory Activity Measure Machine-hours Number of setups Number of products. Direct labour-hours Activity Measure Machine-hours Number of setups. Number of products Direct labour-hours. Activity rate Product Y 7,800 40 per DLH 1 8,800 Estimated Overhead Cost $249,600 $162,400 $ 92,000 $309,600 Product Z 4,200 240 1 5,600 Expected Activity 12,000 MH 280 setups 2 products Required: What is the activity rate for the General Factory activity cost…
Required information [The following information applies to the questions displayed below.] 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 setups Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Estimated Overhead Product Y Product Z 6,100 50 4,900 60 Number of products 1 1 Direct labor-hours 7,100 6,100 Cost $ 210,100 $ 45,100 $ 75,000 $ 241,000 Expected Activity 11,000 MHS 110 setups 2 products 13,200 DLHS 5. What is the activity rate for the Product Design activity…
Required information [The following information applies to the questions displayed below.] 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 setups Number of products Direct labor-hours Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Estimated Overhead Product Y Product Z 6,100 50 4,900 60 1 1 7,100 6,100 Cost $ 210,100 Expected Activity 11,000 MHS 110 setups $ 45,100 $ 75,000 2 products $ 241,000 13,200 DLHS 12. Using the ABC system, what percentage of the Machining…
! Required information [The following information applies to the questions displayed below.] Hickory 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 labour-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: Machining Machine setups Product design General factory Activity Measure Machine-hours Number of setups. Number of products Direct labour-hours Activity Measure Machine-hours Number of setups Number of products Direct labour-hours Total manufacturing overhead cost Product Y 6,500 50 7,500 Estimated Overhead Cost $195,000 $67,500 $ 79,000 $245,000 Product Z 3,500 100 1 4,500 Expected Activity 10,000 MH 150 setups 2 products 12,000 DLHS Required: Using the ABC system, how much total…
Required information Foundational (Algo) [LO4-1, LO4-2, LO4-3, LO4-4] Greenwood 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 Machining Machine setups Production design General factory Activity Measure Machining Number of setups Number of products Direct labor-hours Estimated Activity Measure Overhead Cost Expected Activity Machine-hours $ 228,000 12,000 MHS Number of setups Number of products Direct labor-hours $ 40,000 $ 74,000 $ 288,000 Product Y Product Z 7,000 40 1 7,000 5,000 60 1 5,000 100 setups 2 products 12,000 DLHS Foundational 4-9 (Algo) 9. Using the ABC system, how much total manufacturing overhead…