Hickory Company manufactures two products13,000 units of Product Y and 5,000 units of Product Z....
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Hickory Company manufactures two products13,000 units of Product Y and 5,000 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 $745,200 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 PoolActivity MeasureEstimated Overhead CostExpected ActivityMachiningMachine-hours$242,40012,000MHsMachine setupsNumber of setups$114,400220setupsProduct designNumber of products$86,0002productsGeneral factoryDirect labor-hours$302,40014,400DLHs
Activity MeasureProduct YProduct ZMachine-hours7,2004,800Number of setups40180Number of products11Direct labor-hours8,2006,200
rev: 03_28_2018_QC_CS-122670
14. Using the ABC system, what percentage of the Product Design cost is assigned to Product Y and Product Z?
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