Hickory 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 implementi

Hickory 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:

Activity Cost PoolActivity MeasureEstimated Overhead CostExpected Activity

  Machining Machine-hours$213,400   11,000 MHs

  Machine setups Number of setups$61,600   140 setups

  Production design Number of products$78,000   2 products

  General factory Direct labor-hours$244,000   13,200 DLHs

Activity MeasureProduct YProduct Z

  Machine-hours6,400  4,600  

  Number of setups60  80  

  Number of products1  1  

  Direct labor-hours7,400  5,800  

What is the company’s plant-wide overhead rate?

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