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Hickory Company manufactures two products—13,000 units of Product Y and 5,000 units of Product Z
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 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 | $ | 231,600 | 12,000 | MH | |
| Machine setups | Number of setups | $ | 55,900 | 130 | setups | |
| Product design | Number of products | $ | 77,000 | 2 | products | |
| General factory | Direct labour-hours | $ | 364,500 | 14,400 | DLHs | |
| Activity Measure | Product Y | Product Z | ||||
| Machine-hours | 6,300 | 5,700 | ||||
| Number of setups | 40 | 90 | ||||
| Number of products | 1 | 1 | ||||
| Direct labour-hours | 9,000 | 5,400 | ||||
1- What is the company's plantwide overhead rate?
2- Using the plantwide overhead rate, how much manufacturing overhead cost is allocated to Product Y and Product Z?
3-What is the activity rate for the Machining activity cost pool?
4- What is the activity rate for the Machine Setups activity cost pool?
5-What is the activity rate for the Product Design activity cost pool?
6- What is the activity rate for the General Factory activity cost pool?
7- Which of the four activities is a batch-level activity?
multiple choice
Machine setups activity
General factory activity
Product design activity
Machining activity
8- Which of the four activities is a product-level activity?
multiple choice
Machining activity
Product design activity
General factory activity
Machine setups activity
9- Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Y?
10- Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Z?
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