Question

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: Activity Cost Pool Activity Measure Estimated Overhead Cost Expected Activity Machining Machine-hours $ 231,600 12,000 MHs Machine setups Number of setups $ 55,900 130 setups Production design Number of products $ 77,000 2 products General factory Direct labor-hours $ 364,500 15,000 DLHs Activity Measure Product Y Product Z Machining 6,300 5,700 Number of setups 40 90 Number of products 1 1 Direct labor-hours 7,300 7,700

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.) 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. Using the plantwide overhead rate, what percentage of the total overhead cost is allocated to Product Y and Product Z? (Round your answers to 2 decimal places.) 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. 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. 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. 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

Solution 9:

Total manufacturing overhead cost assigned to Product Y is:

Activity	Overhead Cost	Activity Drivers		Activity Rate
Machining	2,31,600	12,000	Machine hours	19.30	per hour
Machine setups	55,900	130	Number of setups	430.00	per setup
Production design	77,000	2	Number of products	38500.00	per inspection
General factory	3,64,500	15,000	Direct labour hours	24.30	per hour

	Product Y
Machining	6,300	1,21,590
Machine setups	40	17,200
Production design	1	38,500
General factory	7,300	1,77,390
Total manufacturing overhead		3,54,680

Solution 10:

Total manufacturing overhead cost assigned to Product Z is:

	Product Z
Machining	5,700	1,10,010
Machine setups	90	38,700
Production design	1	38,500
General factory	7,700	1,87,110
Total manufacturing overhead		3,74,320

Solution 11:

Total overhead cost is allocated to Product Y and Product Z using plantwide rate is:

	Product Y	Product Z	Total
Total cost	354780	374220	7,29,000
Direct labour hours	7,300	7,700
	48.67%	51.33%

Solution 12:

Using the ABC system, percentage of the Machining costs assigned to Product Y and Product Z is:

	Product Y	Product Z	Total
Machining Cost	121590	110010	2,31,600
Machining hours	6,300	5,700	12,000
	52.50%	47.50%