Question

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 labour-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 Measure	Estimated Overhead Cost		Expected Activity
Machining	Machine-hours	$	216,700	11,000	MHs
Machine setups	Number of setups	$	79,900	170	setups
Production design	Number of products	$	81,000	2	products
General factory	Direct labour-hours	$	296,400	13,200	DLHs

Activity Measure	Product Y	Product Z
Machine-hours	6,700	4,300
Number of setups	60	110
Number of products	1	1
Direct labour-hours	7,700	5,500

1. What is the activity rate for the General Factory activity cost pool? (Round your answer to 2 decimal places.)

Activity Rate = ? per DLH

2. Using the plantwide overhead rate, how much manufacturing overhead cost is allocated to Product Y and Product Z? (Round your intermediate calculations to 2 decimal places and final answers to the nearest dollar amount.)

Manufacturing Overhead Allocated Product Y = ?

Manufacturing Overhead Allocated Product Z = ?

Answer 1