Dinabhai (15Hickory Company manufactures two products-13,000 units of Product Y and 5,000 units of Product Z. The company usesa plantwide overhead rate based on direct labor-hours. It is considering implementing an activity-based costing (ABC)system that allocates all $829,500 of its manufacturing overhead to four cost pools. The following additional information isavailable for the company as a whole and for Products Y and ZEstimated OverheadCost$ 246,000$137,500$ 89,000$ 357,000Activity Cost PoolMachiningMachine setupsProduct designGeneral factoryActivity HeasureMachine-hoursNumber of setupsNumber of productsDirect labor hoursActivity MeasureMachine hoursNumber of setupsNumber of productsDirect labor-hoursProduct Y7,5004018,500Total manufacturing overhead costProduct Z4,50021015,900Answer is complete but not entirely correct.295,201Expected Activity.12,000 s250 setups2 products10. Using the ABC system, how much total manufacturing overhead cost is assigned to Product Z?Note: Round Intermediate calculations to 2 decimal places and final answer to the nearest whole dollar.14,400 DLHS

ABC system assigns indirect overhead cost to products based on activites and activity level.

Activity Cest Pool Machining Machine setups Product design General factory Activity Measure Machine hours Number of setups Number of products Direct labor-hours Activity Measure Machine-hours Number of setups Number of products Oirect labor-hours Estimated Overhead Product Y Product 2 7,500 40 1 8,500 4,500 210 1 5,900 Cost $ 246,000 $ 137,500 $ 89,000 $ 357,000 Expected 12,000 250 2 14,400

Activity Cest Pool Machining Machine setups Product design General factory Activity Measure Machine hours Number of setups Number of products Direct labor-hours Activity Measure Machine-hours Number of setups Number of products Oirect labor-hours Estimated Overhead Product Y Product 2 7,500 40 1 8,500 4,500 210 1 5,900 Cost $ 246,000 $ 137,500 $ 89,000 $ 357,000 Expected 12,000 250 2 14,400

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter18: Activity-based Costing

Section: Chapter Questions

Problem 2PA: The management of Gwinnett County Chrome Company, described in Problem 1A, now plans to use the...

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