Required information [The following information applies to the questions displayed below.] 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 $684,000 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 $ 235,200 $73,600 $ 80,000 $ 295,200 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 6,600 5,400 120 40 1 7,600 6,800 Expected Activity 12,000 MHS 160 setups 2 products 14,400 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.
![Required information
[The following information applies to the questions displayed below.]
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 $684,000 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
$ 235,200
$73,600
$ 80,000
$ 295,200
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
6,600
5,400
40
120
1
7,600
6,800
Expected Activity
12,000 MHS
160 setups
2 products
14,400 DLHS](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4298f87c-fe5e-497b-9611-908e886d14d5%2Ffcf45159-8a58-4548-85d7-9e7169f796e0%2Fkqpg2ga_processed.png&w=3840&q=75)
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
