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 $829,500 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
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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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
$829,500 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
Machining
Machine setups
Product design
General factory
Number of setups
Number of products
Direct labor-hours
Activity Measure
Machine-hours
Machine-hours
Number of setups
Number of products
Direct labor-hours
Product Y
7,500
40
1
8,500
Estimated Overhead Cost Expected Activity
$ 246,000
12,000
$ 137,500
$ 89,000
$ 357,000
Total manufacturing overhead cost
Product Z
4,500
210
Total manufacturing overhead cost
1
5,900
X Answer is complete but not entirely correct.
$ 475,465 X
250
> Answer is complete but not entirely correct.
$ 443,011 X
2
14.400
9. Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Y?
(Round all intermediate calculations to 2 decimal places.)
MHs
setups
products
DLHs
10. Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Z?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F12a70b2a-1ff9-4e3b-a60f-3e24497bf33c%2Fee11ada2-daee-43f4-af8f-66dbad94bddf%2Feo7p9h_processed.jpeg&w=3840&q=75)
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