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What percentage of the product design cost is assigned

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Reference no: EM132581006

Hickory 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 $745,200 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                     Activity  Measure               Estimated Overhead Cost Expected

Activity Machining              Machine-hours               $242,400                          12,000 MHs

Machine setups               Number of setups                 $114,400                        220 setups

Product design                Number of products               $86,000                  2 products

General factory             Direct labor-hours                    $302,400                    14,400 DLHs

Activity Measure         Product Y             Product Z

Machine-hours               7,200                 4,800

Number of setups             40                     180

Number of products              1                      1

Direct labor-hours                 8,200             6,200

Question 1: Using the ABC system, what percentage of the Product Design cost is assigned to Product Y and Product Z?

Reference no: EM132581006

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