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: Estimated Overhead Activity Cost Pool Machining Machine setups Production design General factory Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Cost $ 242,400 $ 114,400 $ 86,000 $ 302,400 Expected Activity 12,000 MHS 220 setups 2 products 12,000 DLHS Activity Measure Machining Number of setups Number of products Product Y 8,200 40 Product z 3,800 180 1 Direct labor-hours 8,200 3,800 A. What is the activity rate for the Machine Setups activity cost pool? Activity rate per setup
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: Estimated Overhead Activity Cost Pool Machining Machine setups Production design General factory Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Cost $ 242,400 $ 114,400 $ 86,000 $ 302,400 Expected Activity 12,000 MHS 220 setups 2 products 12,000 DLHS Activity Measure Machining Number of setups Number of products Product Y 8,200 40 Product z 3,800 180 1 Direct labor-hours 8,200 3,800 A. What is the activity rate for the Machine Setups activity cost pool? Activity rate per setup
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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