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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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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](https://content.bartleby.com/qna-images/question/e9de9e35-f9dd-41b5-bcbf-6f913370a036/19bb4779-cdd2-4431-8acd-ecef71dee522/r3hp8u8_thumbnail.jpeg)
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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
Expert Solution
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