FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Requlred Informatlon
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
Expected
Activity
12, 000 МHs
220 setups
2 products
12,000 DLHS
Cost
$ 242,400
$ 114,400
$ 86,000
$ 302,400
Activity Measure!
Machining
Number of setups
Number of products
Direct labor-hours,
Product Y
8,200
40
1.
8,200
Product Z
3,800
180
3,800
3. What is the activity rate for the Machining activity cost pool? (Round your answer to2 declmal places.)
Activity rate
per MH
< Prev
4
of 15
lext >
15
****** ENNKR
92°F AQI 61 A E
ere to search
DELL
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Transcribed Image Text:Requlred Informatlon 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 Expected Activity 12, 000 МHs 220 setups 2 products 12,000 DLHS Cost $ 242,400 $ 114,400 $ 86,000 $ 302,400 Activity Measure! Machining Number of setups Number of products Direct labor-hours, Product Y 8,200 40 1. 8,200 Product Z 3,800 180 3,800 3. What is the activity rate for the Machining activity cost pool? (Round your answer to2 declmal places.) Activity rate per MH < Prev 4 of 15 lext > 15 ****** ENNKR 92°F AQI 61 A E ere to search DELL ...
Expert Solution
Check Mark
Step 1

Activity based costing system means that where overhead is allocated on the basis of different activities and not on single plantwide overhead rate.

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