Question

Required information Greenwood Company manufactures two products—15,000 units of Product Y and 7000 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 Machining Machine setups Production design General factory Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Estimated Overhead Cost $ 227,790 $ 153,900 $ 91,000 $ 257,000 Expected Activity 11,000 MHS 270 setups 2 products 10,000 DLHS Product Y 8,700 Activity Measure Machining Number of setups Number of products Direct labor-hours Product z 2,300 210 60 8,700 1,300 9. 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.) Total manufacturing overhead cost

Answer 1

Answer

• Requirement 9

>Total manufacturing overhead cost allocated to Product Y
= (Machine $ 227700 x 8700/11000)+(Setup $ 153900 x 60/270)+(Design $ 91000 x ½)+(General factory $ 257000 x 8700/10000)
= 180090+34200+45500+223590
= $ 483,380 Answer