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(Solution Download) Hickory Company manufactures two productsAc???14,000 units of Product Y and 6,000 units of Produc


 

 

 

 

 

 

 

Hickory Company manufactures two productsAc???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 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

  MachiningMachine-hours$200,000

 

  

10,000MHs
  Machine setupsNumber of setups$

 

100,000   

200setups
  Production

 

design

Number of products$

 

84,000   

2products
  General factoryDirect labor-hours$300,000

 

  

12,000DLHs

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Activity

 

Measure

Product YProduct Z
  Machine-hours7,0003,000
  Number of

 

setups

50150
  Number of

 

products

11
  Direct

 

labor-hours

8,0004,000

 

rev: 10_24_2014_QC_57437

 

1.

 

value:

 

0.66 points

 

 

 

 

 

 

 

 

 

 

 

 

 

Required:
What is the companyAc??cs plantwide

 

overhead rate?

 

ask your instructor a questioncheck my workreferencesebook &

 

resources

 

2.

 

value:

 

0.66 points

 

 

 

 

 

 

 

 

 

 

 

 

 

Required:

 

Using the plantwide overhead rate, how much manufacturing

 

overhead cost is allocated to Product Y and Product Z?

 

 

ask your instructor a questioncheck my workreferencesebook &

 

resources

 

3.

 

value:

 

0.66 points

 

 

 

 

 

 

 

 

 

 

 

 

 

Required:
What is the activity rate for

 

the Machining activity cost pool?

 

ask your instructor a questioncheck my workreferencesebook &

 

resources

 

4.

 

value:

 

0.66 points

 

 

 

 

 

 

 

 

 

 

 

 

 

Required:
What is the activity rate for

 

the Machine Setups activity cost pool?

 

ask your instructor a questioncheck my workreferencesebook &

 

resources

 

5.

 

value:

 

0.66 points

 

 

 

 

 

 

 

 

 

 

 

 

 

Required:
What is the activity rate for

 

the Product Design activity cost pool?

 

ask your instructor a questioncheck my workreferencesebook &

 

resources

 

6.

 

value:

 

0.66 points

 

 

 

 

 

 

 

 

 

 

 

 

 

Required:
What is the activity rate for

 

the General Factory activity cost pool?

 

ask your instructor a questioncheck my workreferencesebook &

 

resources

 

7.

 

value:

 

0.66 points

 

 

 

 

 

 

 

 

 

 

 

 

 

Required:
Which of the four activities is

 

a batch-level activity?

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General factory activity
Machine setups activity
Product design activity
Machining activity

 

ask your instructor a questioncheck my workreferencesebook &

 

resources

 

8.

 

value:

 

0.66 points

 

 

 

 

 

 

 

 

 

 

 

 

 

Required:
Which of the four activities is

 

a product-level activity?

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Machining activity
Product design activity
General factory activity
Machine setups activity

 

ask your instructor a questioncheck my workreferencesebook &

 

resources

 

9.

 

value:

 

0.66 points

 

 

 

 

 

 

 

 

 

 

 

 

 

Required:

 

Using the ABC system, how much total manufacturing overhead cost

 

would be assigned to Product Y? (Do not round intermediate

 

calculations.)

 

 

rev: 10_24_2014_QC_57437

 

ask your instructor a questioncheck my workreferencesebook &

 

resources

 

10.

 

value:

 

0.66 points

 

 

 

 

 

 

 

 

 

 

 

 

 

Required:

 

Using the ABC system, how much total manufacturing overhead cost

 

would be assigned to Product Z? (Do not round intermediate

 

calculations.)

 

 

rev: 10_24_2014_QC_57437

 

ask your instructor a questioncheck my workreferencesebook &

 

resources

 

11.

 

value:

 

0.66 points

 

 

 

 

 

 

 

 

 

 

 

 

 

Required:
Using the plantwide overhead

 

rate, what percentage of the total overhead cost is allocated to

 

Product Y and Product Z? (Round your "Percentage" answer to

 

1 decimal place. (i.e. .1234 should be entered as

 

12.3))

 

ask your instructor a questioncheck my workreferencesebook &

 

resources

 

12.

 

value:

 

0.66 points

 

 

 

 

 

 

 

 

 

 

 

 

 

Required:
Using the ABC system, what

 

percentage of the Machining costs is assigned to Product Y and

 

Product Z?

 

ask your instructor a questioncheck my workreferencesebook &

 

resources

 

13.

 

value:

 

0.66 points

 

 

 

 

 

 

 

 

 

 

 

 

 

Required:
Using the ABC system, what

 

percentage of Machine Setups cost is assigned to Product Y and

 

Product Z?

 

ask your instructor a questioncheck my workreferencesebook &

 

resources

 

14.

 

value:

 

0.66 points

 

 

 

 

 

 

 

 

 

 

 

 

 

Required:
Using the ABC system, what

 

percentage of the Product Design cost is assigned to Product Y and

 

Product Z?

 

ask your instructor a questioncheck my workreferencesebook &

 

resources

 

15.

 

value:

 

0.76 points

 

 

 

 

 

 

 

 

 

 

Required:
Using the ABC system, what

 

percentage of the General Factory cost is assigned to Product Y and

 

Product Z? (Round your "Percentage" answer to 1 decimal

 

place. (i.e. .1234 should be entered as 12.3))

 


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