Hickory 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 $630,000 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 Machining Machine setups Product design Activity Measure Machine-hours Number of setups Number of products Estimated Overhead Cost $ 228,000 Expected Activity 12,000 MHs 100 setups $ 40,000 $ 74,000 2 products $ 288,000 14,400 DLHS General factory Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Direct labor-hours Product Y Product Z 10,000 40 1 2,000 60 7,000 1 7,400 13. Using the ABC system, what percentage of Machine Setups cost is assigned to Product Wand Product Z? Note: Round your "Percentage" answers to 2 decimal places. Product Y Product Z

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Chapter1: Financial Statements And Business Decisions
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Hickory 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 $630,000 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
Machining
Machine setups
Product design
Activity Measure
Machine-hours
Number of setups
Number of products
Estimated Overhead
Cost
$ 228,000
Expected Activity
12,000 MHs
100 setups
$ 40,000
$ 74,000
2 products
$ 288,000
14,400 DLHS
General factory
Activity Measure
Machine-hours
Number of setups
Number of products
Direct labor-hours
Direct labor-hours
Product Y Product Z
10,000
40
1
2,000
60
7,000
1
7,400
13. Using the ABC system, what percentage of Machine Setups cost is assigned to Product Wand Product Z?
Note: Round your "Percentage" answers to 2 decimal places.
Product Y
Product Z
Transcribed Image Text:Hickory 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 $630,000 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 Machining Machine setups Product design Activity Measure Machine-hours Number of setups Number of products Estimated Overhead Cost $ 228,000 Expected Activity 12,000 MHs 100 setups $ 40,000 $ 74,000 2 products $ 288,000 14,400 DLHS General factory Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Direct labor-hours Product Y Product Z 10,000 40 1 2,000 60 7,000 1 7,400 13. Using the ABC system, what percentage of Machine Setups cost is assigned to Product Wand Product Z? Note: Round your "Percentage" answers to 2 decimal places. Product Y Product Z
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