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Junior Member
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Oct 8, 2014, 08:14 PM
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Total Manufacturing Costs Question Need Help
Hickory Company manufactures two products—15,000 units of Product Y and 7,000 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 |
$ |
213,400 |
11,000 |
MHs |
Machine setups |
Number of setups |
$ |
61,600 |
140 |
setups |
Production design |
Number of products |
$ |
78,000 |
2 |
products |
General factory |
Direct labor-hours |
$ |
244,000 |
13,200 |
DLHs |
|
Activity Measure |
Product Y |
Product Z |
Machine-hours |
6,400 |
4,600 |
Number of setups |
60 |
80 |
Number of products |
1 |
1 |
Direct labor-hours |
7,400 |
5,800 |
Question : 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 answers to the nearest dollar amount.)
I got $326,312 by adding results of multiplying 19.40 x 6,400 + 60 x 440 + 39,000 + 7,400 x 18.48 but this was marked wrong and the activity rates I got were marked right prior. |
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Ultra Member
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Oct 9, 2014, 04:05 AM
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 Originally Posted by sagnik2422
Hickory Company manufactures two products—15,000 units of Product Y and 7,000 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 |
$ |
213,400 |
11,000 |
MHs |
Machine setups |
Number of setups |
$ |
61,600 |
140 |
setups |
Production design |
Number of products |
$ |
78,000 |
2 |
products |
General factory |
Direct labor-hours |
$ |
244,000 |
13,200 |
DLHs |
|
Activity Measure |
Product Y |
Product Z |
Machine-hours |
6,400 |
4,600 |
Number of setups |
60 |
80 |
Number of products |
1 |
1 |
Direct labor-hours |
7,400 |
5,800 |
Question : 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 answers to the nearest dollar amount.)
I got $326,312 by adding results of multiplying 19.40 x 6,400 + 60 x 440 + 39,000 + 7,400 x 18.48 but this was marked wrong and the activity rates I got were marked right prior. |
how wrong were you? If you used a spreadsheet and referenced a cell instead of a number entered in a cell ie; 18.48 or 18.484848^ you would get a different answer I did the problem and got the same answer you did using rounded amounts
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