Question

Greenwood Company manufactures two products—14,000 units of Product Y and 6,000 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: Use this information to anwser questions 1-3 (some questions have multiple parts).

Activity Cost Pool	Activity Measure	Estimated Overhead Cost			Expected Activity
Machining	Machine-hours	$	203,000			10,000	MHs
Machine setups	Number of setups	$	121,900			230	setups
Production design	Number of products	$	87,000			2	products
General factory	Direct labor-hours	$	379,500			15,000	DLHs

Activity Measure	Product Y			Product Z
Machining		8,300			1,700
Number of setups		50			180
Number of products		1			1
Direct labor-hours		9,500			5,500

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

1b. What is the activity rate for the Machine Setups activity cost pool?

1c. What is the activity rate for the Product Design activity cost pool?

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

2a. Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Y? (Round your intermediate calculations to 2 decimal places. Round your answers to the nearest dollar amount.)

2b. Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Z? (Round your intermediate calculations to 2 decimal places. Round your answers to the nearest dollar amount.)

2c. 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 answers to 2 decimal places.)

2d. 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 answers to 2 decimal places.)

3a. 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 answers to 2 decimal places.)

3b. Using the ABC system, what percentage of the Product Design cost is assigned to Product Y and Product Z? (Round your answers to 2 decimal places.)

3c. 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.)

    

Answer 1

1a)	20.3	per machine hours
1b)	530	per setup
1c)	43500	per product
1d)	25.3	per direct labor hours
2a)	478840
2b)	312560
2c)		product Y	product Z
		63.33%	36.67%
2d)					product Y	product Z
	Machining costs				83%	17%
3a)					product Y	product Z
	Machine setups				22%	78%
3b)					product Y	product Z
	product design cost				50%	50%
3c)					product Y	product Z
	General factory cost				63%	37%