Question

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 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
Machining   Machine-hours   $   242,400   12,000   MHs
Machine setups   Number of setups   $   114,400   220   setups
Production design   Number of products   $   86,000   2   products
General factory   Direct labor-hours   $   302,400   14,400   DLHs

Activity Measure   Product Y   Product Z
Machine-hours   7,200   4,800
Number of setups   40   180
Number of products   1   1
Direct labor-hours   8,200   6,200

What is the company’s plantwide overhead rate? (Round your answer to 2 decimal places.)

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.)

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

What is the activity rate for the Machine Setups activity cost pool?

What is the activity rate for the Product Design activity cost pool?

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

Which of the four activities is a batch-level activity?

   Machining activity
   Product design activity
   General factory activity
   Machine setups activity

Which of the four activities is a product-level activity?

   General factory activity
   Machine setups activity
   Machining activity
   Product design activity

Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Y? (Do not round intermediate calculations and round your final answer to the nearest dollar amount.)

Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Z? (Do not round intermediate calculations and round your final answer to the nearest dollar amount.)

Using the plantwide overhead rate, what percentage of the total overhead cost is allocated to Product Y and Product Z? (Round your intermediate calculations to 2 decimal places. Round your "Percentage" answers to 2 decimal places. (i.e. 0.1234 should be entered as 12.34).)

Using the ABC system, what percentage of the Machining costs is assigned to Product Y and Product Z? (Round your intermediate calculations to 2 decimal places. Round your "Percentage" answers to 2 decimal places. (i.e. 0.1234 should be entered as 12.34).)

Using the ABC system, what percentage of Machine Setups cost is assigned to Product Y and Product Z? (Round your intermediate calculations to 2 decimal places. Round your "Percentage" answers to 2 decimal places. (i.e. 0.1234 should be entered as 12.34).)

Using the ABC system, what percentage of the Product Design cost is assigned to Product Y and Product Z? (Round your "Percentage" answers to 2 decimal places. (i.e. 0.1234 should be entered as 12.34)).

Using the ABC system, what percentage of the General Factory cost is assigned to Product Y and Product Z? (Round your intermediate calculations to 2 decimal places. Round your "Percentage" answers to 2 decimal places. (i.e. 0.1234 should be entered as 12.34).)

Answer 1

	Loan
1	Receivables	21.00
2	57.1% on receivables	11.99	loan value
3	Processing fees	0.03
4	Loan rate 5% annually	0.05	Interest
	Effective annual cost
	interest	0.05
	Borrowing cost
	processing fees	0.03