Question

Question 6

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 labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates all $684,000 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	Activity Measure	Estimated Overhead Cost		Expected Activity
Machining	Machine-hours	$	200,000	10,000	MHs
Machine setups	Number of setups	$	100,000	200	setups
Product design	Number of products	$	84,000	2	products
General factory	Direct labor-hours	$	300,000	12,000	DLHs

Activity Measure	Product Y	Product Z
Machine-hours	7,000	3,000
Number of setups	50	150
Number of products	1	1
Direct labor-hours	8,000	4,000

What is the activity rate for the Machining activity cost pool?

Group of answer choices

$20 per machine hour

$16.66 per machine hour

$57 per machine hour

$68.4 per machine hour

Question 7

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 labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates all $684,000 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	Activity Measure	Estimated Overhead Cost		Expected Activity
Machining	Machine-hours	$	200,000	10,000	MHs
Machine setups	Number of setups	$	100,000	200	setups
Product design	Number of products	$	84,000	2	products
General factory	Direct labor-hours	$	300,000	12,000	DLHs

Activity Measure	Product Y	Product Z
Machine-hours	7,000	3,000
Number of setups	50	150
Number of products	1	1
Direct labor-hours	8,000	4,000

What is the activity rate for the Product Design activity cost pool?

Group of answer choices

$25 per direct labor hour

$42,000 per product

$84,000

$1 per product

Question 8

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 labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates all $684,000 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	Activity Measure	Estimated Overhead Cost		Expected Activity
Machining	Machine-hours	$	200,000	10,000	MHs
Machine setups	Number of setups	$	100,000	200	setups
Product design	Number of products	$	84,000	2	products
General factory	Direct labor-hours	$	300,000	12,000	DLHs

Which of the following is a product-level activity?

Group of answer choices

General factory activity

Machine setups activity

machining activity

Product design activity

Question 9

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 labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates all $684,000 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	Activity Measure	Estimated Overhead Cost		Expected Activity
Machining	Machine-hours	$	200,000	10,000	MHs
Machine setups	Number of setups	$	100,000	200	setups
Product design	Number of products	$	84,000	2	products
General factory	Direct labor-hours	$	300,000	12,000	DLHs

Activity Measure	Product Y	Product Z
Machine-hours	7,000	3,000
Number of setups	50	150
Number of products	1	1
Direct labor-hours	8,000	4,000

Using the ABC system, how much overhead cost would be assigned to Product Y?

Group of answer choices

$228,000

$277,000

$407,000

$456,000

Answer 1

Answer(6):-

Activity rate for the Machining activity cost pool is calculated on the basis of machine hours available.

Total Machine Hours = 7000 +3000 =10,000

MAchining overhead cost = 200,000

Activity rate for the Machining activity cost pool = 200,000/10,000 = $20 per machine hour.

Answer(7):-

Activity rate for the Product Design activity cost pool is calculated on the basis of Number of products.

Number of products = 1 + 1 = 2

Product design overhead cost = 84,000

Activity rate for the Product Design activity = 84,000 /2 = $42,000 per product.

Answer(8):-

The correct answer is Product design activity.

Becasue for product design overhead cost activity is calculated or apportioned on product on the basis of number of product.

Answer(9):- The correct answer is $407,000.

Activity Cost Pool	Overhead cost (u)	Activity Measure	(v)	Activity Rate (W) = (u/v)
Machining	200,000	Machine Hour	10,000	20
Machine Setup	100,000	Number of setup	200	500
Product Design	84,000	Number of products	2	42000
General factory	300,000	Direct labour hour	12,000	25
	684,000
Product Y
Machining	140,000	(7000*20)
Machine Set up	25,000	(50*500)
Product Design	42,000	(42,000*1)
General factory	200,000	(8000*25)
Total cost	407,000