Question

Greenwood 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 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	$	231,000	11,000	MHs
Machine setups	Number of setups	$	180,000	300	setups
Production design	Number of products	$	94,000	2	products
General factory	Direct labor-hours	$	260,000	10,000	DLHs

  

Activity Measure	Product Y	Product Z
Machining	8,000	3,000
Number of setups	60	240
Number of products	1	1
Direct labor-hours	9,000	1,000

1.

value:
10.00 points

Required information

Required:

1.	What is the company’s plantwide overhead rate? (Round your answer to 2 decimal places.)

2.

value:
10.00 points

Required information

2.	Using the plantwide overhead rate, how much manufacturing overhead cost is allocated to Product Y and Product Z? (Round your intermediate calculations to 2 decimal places and final answers to the nearest dollar amount.)

      

3.

value:
10.00 points

Required information

3.	What is the activity rate for the Machining activity cost pool? (Round your answer to 2 decimal places.)

      

4.

value:
10.00 points

Required information

4.	What is the activity rate for the Machine Setups activity cost pool? (Round your answer to 2 decimal places.)

       

5.

value:
10.00 points

Required information

5.	What is the activity rate for the Product Design activity cost pool? (Round your answer to 2 decimal places.)

       

6.

value:
10.00 points

Required information

6.	What is the activity rate for the General Factory activity cost pool? (Round your answer to 2 decimal places.)

      

7.

value:
10.00 points

Required information

7.	Which of the four activities is a batch-level activity?
	Machining activity General factory activity Product design activity Machine setups activity

8.

value:
10.00 points

Required information

8.	Which of the four activities is a product-level activity?
	Machining activity Product design activity General factory activity Machine setups activity

9.

value:
10.00 points

Required information

9.	Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Y? (Round your intermediate calculations to 2 decimal places and final answer to the nearest dollar amount.)

      

k

10.

value:
10.00 points

Required information

10.	Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Z? (Round your intermediate calculations to 2 decimal places and final answer to the nearest dollar amount.)

      

11.

value:
10.00 points

Required information

12.

value:
10.00 points

Required information

12.	Using the ABC system, what percentage of the Machining costs is assigned to Product Y and Product Z? (Round your answers to 2 decimal places.)

        

13.

value:
10.00 points

Required information

13.	Using the ABC system, what percentage of Machine Setups cost is assigned to Product Y and Product Z? (Round your answers to 2 decimal places.)

        

14.

value:
10.00 points

Required information

14.	Using the ABC system, what percentage of the Product Design cost is assigned to Product Y and Product Z? (Round your answers to 2 decimal places.)

       

15.

value:
10.00 points

Required information

15.	Using the ABC system, what percentage of the General Factory cost is assigned to Product Y and Product Z? (Round your answers to 2 decimal places.)

      

Answer 1

1)Estimated Total overhead=231000+180000+94000+260000=765000

Estimated total DLH =10000

Plantwide overhead rate =Estimated total overhead/Estimated total DLH

               = 765000/10000

               = $ 76.5 Per DLH

2)manufacturing overhead cost allocated to Product Y =Overhead rate * DLH allocated to Y

             = 76.5 * 9000

             = $ 688,500

manufacturing overhead cost allocated to Product Z = 76.5 * 1000

              = $ 76500

3)Activity rate for the Machining activity cost pool =Estimated overhead/estimated activity

      = 231000 / 11000

        = $21 per MH

4)Activity rate for the Machine Setups activity cost pool =Estimated overhead/estimated activity

               = 180000/300

              = $ 600 per set up