Greenwood Company – Traditional And Activity Based Overhead Allocation

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Greenwood 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:

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Activity Cost Pool                 Activity Measure        Estimated Overhead Cost Expected Activity Machining                                     Machine-hours            $ 216,700                    11,000 MHs

Machine setups                       Number of setups        $ 79,900                      170 setups

Production design                   Number of products    $ 81,000                      2 products

General factory                       Direct labor-hours       $ 247,000                    10,000 DLHs

Activity Measure                    Product Y                   Product Z

Machining                               6,700                           4,300

Number of setups                    60                                110

Number of products                1                                  1

Direct labor-hours                   7,700                           2,300

1. What is the company’s plantwide overhead rate? (Round your answer to 2 decimal places.) (Per DHL)

2. Using the plantwide overhead rate, how much manufacturing overhead cost is allocated to Product Y and Product Z? (Round your intermediate calculations to 2 decimal places and final answers to the nearest dollar amount.) (Manufacturing Overhead allocated for Product Y and Product Z)

3. What is the activity rate for the Machining activity cost pool? (Round your answer to 2 decimal places.) (Activity Rate per MH)

4. What is the activity rate for the Machine Setups activity cost pool? (Round your answer to 2 decimal places.) (Activity Rate per set up)

5. What is the activity rate for the Product Design activity cost pool? (Round your answer to 2 decimal places.) (Activity Rate per product)

6. What is the activity rate for the General Factory activity cost pool? (Round your answer to 2 decimal places.) (Activity Rate per DLH) 7.

7. Which of the four activities is a batch-level activity? A. Machining activity B. General factory activity C. Product design activity D. Machine setups activity

8. 8. Which of the four activities is a product-level activity? A. Machining activity B. General factory activity C. Product design activity D. Machine setups activity

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 and final answer to the nearest dollar amount.)(Total Manufacturing Overhead Cost)

10. Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Z? (Round your intermediate calculations to 2 decimal places and final answer to the nearest dollar amount.)( Total Manufacturing Overhead Cost)

11. Using the plantwide overhead rate, what percentage of the total overhead cost is allocated to Product Y and Product Z? (Round your answers to 2 decimal places.) (Total Overhead Cost Product Y% Product Z%)

12. Using the ABC system, what percentage of the Machining costs is assigned to Product Y and Product Z? (Round your answers to 2 decimal places.) (Machining Cost Product Y% Product Z%)

13. Using the ABC system, what percentage of Machine Setups cost is assigned to Product Y and Product Z? (Round your answers to 2 decimal places.)( Machining Set Up Cost Product Y% Product Z%)

14. Using the ABC system, what percentage of the Product Design cost is assigned to Product Y and Product Z? (Round your answers to 2 decimal places.)(Product Design Cost Product Y% Product Z%)

 

15. Using the ABC system, what percentage of the General Factory cost is assigned to Product Y and Product Z? (Round your answers to 2 decimal places.)(General Factory Cost Product Y% Product Z%)

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