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 Cost Pool Machining Machine setups Production design General factory 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 General factory cost Product Y Product Z 7,000 5,000 40 60 1 7,000 Product Y Estimated Overhead Cost $ 228,000 $ 40,000 $ 74,000 $ 288,000 % 1 5,000 Product Z 15. Using the ABC system, what percentage of the General Factory cost is assigned to Product Y and Product Z? (Round your intermediate calculations and final answers to 2 decimal places.) Expected Activity 12,000 MHS % 100 setups 2 products 12,000 DLHS
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 Cost Pool Machining Machine setups Production design General factory 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 General factory cost Product Y Product Z 7,000 5,000 40 60 1 7,000 Product Y Estimated Overhead Cost $ 228,000 $ 40,000 $ 74,000 $ 288,000 % 1 5,000 Product Z 15. Using the ABC system, what percentage of the General Factory cost is assigned to Product Y and Product Z? (Round your intermediate calculations and final answers to 2 decimal places.) Expected Activity 12,000 MHS % 100 setups 2 products 12,000 DLHS
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 2PA: The management of Gwinnett County Chrome Company, described in Problem 1A, now plans to use the...
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Concept explainers
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
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 Cost Pool
Machining
Machine setups
Production design
General factory
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
General factory cost
Product Y Product Z
7,000
5,000
40
60
1
1
7,000
5,000
Product Y
Estimated
Overhead Cost
$ 228,000
$ 40,000
$ 74,000
$ 288,000
%
Product Z
15. Using the ABC system, what percentage of the General Factory cost is assigned to Product Y and Product Z? (Round your
intermediate calculations and final answers to 2 decimal places.)
Expected Activity
12,000 MHS
%
100 setups
2 products
12,000 DLHS
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