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Hickory Company manufactures two products14,000 units of Product Y and 6,000 units of Product Z. The company uses a plantwide overhead rate based on direct labour-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 Measure	Estimated Overhead Cost	Expected Activity
Machining	Machine-hours	$200,000	10,000 MH
Machine setups	Number of setups	$100,000	200 setups
Product design	Number of products	$ 84,000	2 products
General factory	Direct labour-hours	$300,000	12,000 DLHs

	Product Y	Product Z
Machine-hours	7,000	3,000
Number of setups	50	150
Number of products	1	1
Direct labour-hours	8,000	4,000

Required:

1. What is the companys plantwide overhead rate?

2. Using the plantwide overhead rate, how much manufacturing overhead cost is allocated to Product Y? How much is allocated to Product Z?

3. What is the activity rate for the Machining activity cost pool?

4. What is the activity rate for the Machine Setups activity cost pool?

5. What is the activity rate for the Product Design activity cost pool?

6. What is the activity rate for the General Factory activity cost pool?

7. Which of the four activities is a batch-level activity? Why?

8. Which of the four activities is a product-level activity? Why?

9. Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Y?

10. Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Z?

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