FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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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 labor-hours. It is considering implementing an activity-based costing (ABC)
system that allocates all $732,100 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 7-2 (Algo)
Activity Measure
Machine-hours
Number of setups
Number of products
Direct labor-hours
Estimated Overhead
Product Y Product Z
7,900
50
1
8,900
2,100
240
1
3,100
Cost
$ 209,000
$ 171,100
$ 93,000
$ 259,000
Expected Activity
10,000 MHS
290 setups
2 products
12,000 DLHs
2. Using the plantwide overhead rate, how much manufacturing overhead cost is allocated to Product Y and Product Z?
Note: Round your intermediate calculations to 2 decimal places and your final answers to the nearest whole dollar amount.
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Transcribed Image Text: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 labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates all $732,100 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 7-2 (Algo) Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Estimated Overhead Product Y Product Z 7,900 50 1 8,900 2,100 240 1 3,100 Cost $ 209,000 $ 171,100 $ 93,000 $ 259,000 Expected Activity 10,000 MHS 290 setups 2 products 12,000 DLHs 2. Using the plantwide overhead rate, how much manufacturing overhead cost is allocated to Product Y and Product Z? Note: Round your intermediate calculations to 2 decimal places and your final answers to the nearest whole dollar amount.
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