Activity Cost Pool Machining Machine setups Production design General factory Required information 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 Measure Machining Number of setups Number of products. Direct labor-hours Activity Measure Machine-hours Number of setups Number of products Direct labor-hours. Activity rate Saved per setup 1 8,800 Estimated Overhead Cost $ 249,600 $ 162,400 $ 92,000 $ 309,600 Product Y Product Z 8,800 3,200 40 240 1 3,200 4. What is the activity rate for the Machine Setups activity cost pool? Expected Activity 12,000 MHS 280 setups 2 products Help Save & Exi 12,000 DLHS Che
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
![al 15 Chapter Four
Activity Cost Pool
Machining
Machine setups
Production design.
General factory
Activity Measure
Machining
Required information
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:
Number of setups
Number of products.
Direct labor-hours
Activity Measure.
Machine-hours
Number of setups
Number of products
Direct labor-hours.
Activity rate
Saved
per setup
Estimated
Overhead Cost
$ 249,600
$ 162,400
$ 92,000
$ 309,600
4. What is the activity rate for the Machine Setups activity cost pool?
Product Y Product Z
8,800
3,200
40
240
1
1
8,800
3,200
S
15
Expected Activity
12,000 MHS
280 setups
of 15
2 products
12,000 DLHS
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www
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Save & Exi
Che](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F943f8f4e-d7d3-41cb-953f-9fba6c250e4b%2F5b3ecc1e-17fe-450c-8208-aa6f14ca43c7%2Fjut7fbv_processed.jpeg&w=3840&q=75)
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Activity rate is the rate which is use to charged overhead to related products. this rate is usees in activity based costing where we need to calculate activity rates for each activity.
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