!Required information[The following information applies to the questions displayed below.]Hickory Company manufactures two products-14,000 units of Product Y and 6,000 units of Product Z. The company usesa 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 availablefor the company as a whole and for Products Y and Z:MachiningMachine setupsProduct designGeneral factoryActivity MeasureMachine-hoursNumber of setups.Number of productsDirect labour-hoursActivity MeasureMachine-hoursNumber of setupsNumber of productsDirect labour-hoursTotal manufacturing overhead costProduct Y6,500507,500EstimatedOverhead Cost$195,000$67,500$ 79,000$245,000Product Z3,50010014,500Expected Activity10,000 MH150 setups2 products12,000 DLHSRequired:Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Z? (Do not round intermediatecalculations and round your final answer to the nearest dollar amount.) Required information[The following information applies to the questions displayed below.]Hickory Company manufactures two products-14,000 units of Product Y and 6,000 units of Product Z. The company usesa 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 availablefor the company as a whole and for Products Y and Z:MachiningMachine setupsProduct designGeneral factoryActivity MeasureMachine-hoursNumber of setupsNumber of productsDirect labour-hoursActivity MeasureMachine-hoursNumber of setupsNumber of productsDirect labour-hoursTotal manufacturing overhead costProduct Y6,5005017,500EstimatedOverhead Cost$195,000$67,500$ 79,000$245,000Product Z3,50010014,500Expected Activity10,000 MH150 setups2 products12,000 DLHSRequired:Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Y? (Do not round intermediatecalculations and round your final answer to the nearest dollar amount.)

Overhead is the amount of expense which is incurred on the making of the products. It includes the…

Hickory Company manufactures two products-14,000 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: Machining Machine setups Product design General factory Activity Measure Machine-hours Number of setups. Number of products Direct labour-hours Activity Measure Machine-hours Number of setups Number of products Direct labour-hours Total manufacturing overhead cost Product Y 6,500 50 1 7,500 Estimated Overhead Cost $195,000 $ 67,500 $ 79,000 $245,000 Product Z 3,500 100 1 4,500 Expected Activity 10,000 MH 150 setups 2 products 12,000 DLHs Required: sing the ABC system, how much total manufacturing overhead cost would be assigned to Product Z? (Do not round intermediat alculations and round your final answer to the nearest dollar amount.)

Hickory Company manufactures two products-14,000 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: Machining Machine setups Product design General factory Activity Measure Machine-hours Number of setups. Number of products Direct labour-hours Activity Measure Machine-hours Number of setups Number of products Direct labour-hours Total manufacturing overhead cost Product Y 6,500 50 1 7,500 Estimated Overhead Cost $195,000 $ 67,500 $ 79,000 $245,000 Product Z 3,500 100 1 4,500 Expected Activity 10,000 MH 150 setups 2 products 12,000 DLHs Required: sing the ABC system, how much total manufacturing overhead cost would be assigned to Product Z? (Do not round intermediat alculations and round your final answer to the nearest dollar amount.)

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 7E: The management of Nova Industries Inc. manufactures gasoline and diesel engines through two...

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Lansing. Inc., provided the following data for its two producing departments: Machine hours are used to assign the overhead of the Molding Department, and direct labor hours are used to assign the overhead of the Polishing Department. There are 30,000 units of Form A produced and sold and 50,000 of Form B. Required: 1. Calculate the overhead rates for each department. 2. Using departmental rates, assign overhead to live two products and calculate the overhead cost per unit. How does this compare with the plantwide rate unit cost, using direct labor hours? 3. What if the machine hours in Molding were 1,200 for Form A and 3,800 for Form B and the direct labor hours used in Polishing were 5,000 and 15,000, respectively? Calculate the overhead cost per unit for each product using departmental rates, and compare with the plantwide rate unit costs calculated in Requirement 2. What can you conclude from this outcome?
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Kenkel, Ltd. uses backflush costing to account for its manufacturing costs. The trigger points are the purchase of materials, the completion of goods, and the sale of goods. Prepare journal entries to account for the following: a. Purchased raw materials, on account, 80,000. b. Requisitioned raw materials to production, 80,000. c. Distributed direct labor costs, 10,000. d. Factory overhead costs incurred, 60,000. (Use Various Credits for the account in the credit part of the entry.) e. Completed all of the production started. f. Sold the completed production for 225,000, on account.
In 20x2, Choctaw Company implements a new process affecting labor and materials. The following reported data are provided to evaluate the effect on the companys productivity: Required: 1. Calculate the productivity profile for 20x1. 2. Calculate the productivity profile for 20x2, and comment on the effect of the new production and assembly process. 3. What if the labor hours used in 20x2 were 112,500? What does comparison of the 20x1 and 20x2 profiles now communicate?
Young Company is beginning operations and is considering three alternatives to allocate manufacturing overhead to individual units produced. Young can use a plantwide rate, departmental rates, or activity-based costing. Young will produce many types of products in its single plant, and not all products will be processed through all departments. In which one of the following independent situations would reported net income for the first year be the same regardless of which overhead allocation method had been selected? a. All production costs approach those costs that were budgeted. b. The sales mix does not vary from the mix that was budgeted. c. All manufacturing overhead is a fixed cost. d. All ending inventory balances are zero.
Geneva, Inc., makes two products, X and Y, that require allocation of indirect manufacturing costs. The following data were compiled by the accountants before making any allocations: The total cost of purchasing and receiving parts used in manufacturing is 60,000. The company uses a job-costing system with a single indirect cost rate. Under this system, allocated costs were 48,000 and 12,000 for X and Y, respectively. If an activity-based system is used, what would be the allocated costs for each product?
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