Greenwood Company manufactures two products14000 units of Pr

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:

  

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

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

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

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

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.)

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

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:

Solution

First Step: Calculate Rate per activity as below Activity OH Total MHS Rate Machining 192000 10000                     19.20 Machine Setup 50400 120                   420.00 Product Design 76000 2             38,000.00 General Factory 387200 16000                     24.20 Cost Allocation to Product Y = Product Y activity multiplied by Rate arrrived as per above Activity Measure Product Y Rate Cost Allocation Machining 6200                                             19.20 119040 Number of setup 50                                          420.00 21000 Number of Product 1                                    38,000.00 38000 Direct labor hours 7200                                             24.20 174240 352280 Cost Allocation to Product Z = Product Z activity multiplied by Rate arrrived as per above Activity Measure Product Y Rate Cost Allocation Machining 3800                                             19.20 72960 Number of setup 70                                          420.00 29400 Number of Product 1                                    38,000.00 38000 Direct labor hours 8800                                             24.20 212960 353320 Plant wide overhead rate = Total overhead divided by total direct labor hours Total Overhead 705600 Labor hours 16000 Plant wide overhead rate 44.10 % Cost Allocation to Y 317520 45.00% Cost Allocation to Z 388080 55.00% 705600 Machining cost assigned Machining cost % Product Y 119040 62% Product Z 72960 38% 192000 setup cost assigned Set up cost % Product Y 21000 42% Product Z 29400 58% 50400 Design Cost Design cost % Product Y 38000 50% Product Z 38000 50% 76000 General Factory overhead General factory overhead % Product Y 174240 45% Product Z 212960 55% 387200