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

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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
Transcribed Image Text:! 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
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