Required information [The following information applies to the questions displayed below.) Hickory 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 $696,000 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: Estimated Overhead Cost $ 224,400 $ 129,600 $ 88,000 $ 254,000 Activity Cost Pool Machining Machine setups Product design General factory Activity Measure Machine-hours Number of setups Number of products Direct labor-hours. Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Product Y Product Z 7,400 3,600 60 180 1 4,800 1 8,400 4. What is the activity rate for the Machine Setups activity cost pool? Expected Activity 11,000 MHS 240 setups. 2 products 13,200 DLHS

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Required information
(The following information applies to the questions displayed below.)
Hickory 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 $696,000 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:
Estimated Overhead
Cost
$ 224,400
$ 129,600
$ 88,000
$ 254,000
Activity Cost Pool
Machining
Machine setups
Product design.
General factory
Activity Measure
Machine-hours
Number of setups
Number of products.
Direct labor-hours
Activity Measure
Machine-hours
Number of setups
Number of products
Direct labor-hours
Product Y Product Z
7,400
3,600
60
180
1
4,800
1
8,400
4. What is the activity rate for the Machine Setups activity cost pool?
Expected Activity
11,000 MHS
240 setups.
2 products
13,200 DLHS
Transcribed Image Text:Required information (The following information applies to the questions displayed below.) Hickory 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 $696,000 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: Estimated Overhead Cost $ 224,400 $ 129,600 $ 88,000 $ 254,000 Activity Cost Pool Machining Machine setups Product design. General factory Activity Measure Machine-hours Number of setups Number of products. Direct labor-hours Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Product Y Product Z 7,400 3,600 60 180 1 4,800 1 8,400 4. What is the activity rate for the Machine Setups activity cost pool? Expected Activity 11,000 MHS 240 setups. 2 products 13,200 DLHS
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