Reference no: EM132729124

Question - 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 labour-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:

Activity Measure Estimated Overhead Expected Activity

Machining machine hours $200,000 10,000 MH

Machine Setup Number of setups $100,000 200 setups

Production Design Number of products $84000 2 products

General Factory DIrect Labour Hours $300,000 12,000 DLHs

Activity Measure Product Y Product Z

machine-hours 7000 3000

Number of setups 50 150

number of products 1 1

Direct Labour-hours 8000 4000

Required -

1. What is the company's plantwide overhead rate?

2. Using the plantwide overhead rate, how much manufacturing overhead cost is allocated to Product Y and Product Z?

3. Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Y and Product Z?

4. Using the plantwide overhead rate, what percentage of the total overhead cost is allocated to Product Y and Product Z?

5. Using the ABC system, what percentage of the Machining costs is assigned to Product Y and Product Z?

6. Using the ABC system, what percentage of Machine Setups cost is assigned to Product Y and Product Z?

7. Using the ABC system, what percentage of the Product Design cost is assigned to Product Y and Product Z?

8. Using the ABC system, what percentage of the General Factory cost is assigned to Product Y and Product Z?