Greenwood Company manufactures two products-15,000 units of Product Y and 7,000 units of Product Z. The comp 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 i available for the company as a whole and for Products Y and Z: Activity Cost Pool Machining Machine setups Production design General factory Activity Measure Machining Number of setups Number of products Direct labor-hours Foundational 4-3 (Algo) Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Activity rate Product Y 7,100 60 per MH 1 7,100 Estimated Overhead Cost $ 210,100 $ 45,100 $ 75,000 $ 241,000 Product Z 3,900 50 1 2,900 Expected Activity 11,000 MHS 110 setups 2 products What is the activity rate for the Machining activity cost pool? (Round your answer to 2 decimal places.) 10,000 DLHS
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.
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Required information
Foundational (Algo) [LO4-1, LO4-2, LO4-3, LO4-4]
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
Machining
Machine setups
Production design
General factory
Activity Measure
Machining
Number of setups
Number of products
Direct labor-hours
Foundational 4-3 (Algo)
Activity Measure
Machine-hours.
Number of setups
Number of products
Direct labor-hours
Activity rate
Product Y
7,100
60
1
7,100
per MH
Estimated
Overhead Cost
$ 210,100
$ 45,100
$ 75,000
$ 241,000
Product Z
3,900
50
1
2,900
Expected Activity
11,000 MHS
110 setups
2 products
3. What is the activity rate for the Machining activity cost pool? (Round your answer to 2 decimal places.)
10,000 DLHS](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2249d734-f746-4e4a-87c9-748b32eb799d%2F21d39730-4b26-4e4d-9228-577819c3c2f4%2F9mu1ddb_processed.png&w=3840&q=75)
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