! Required information [The following information applies to the questions displayed below.] 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 $664,200 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 Pool Machining Machine setups Product design General factory Activity Measure Machine-hours. Number of setups Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Estimated Overhead Product Y Product Z 7,100 60 Number of products 3,900 150 1 Direct labor-hours 8,100 5,100 Cost $ 221,100 $ 107,100 $ 85,000 $ 251,000 Expected Activity 11,000 MHS 210 setups 2 products 13,200 DLHS 8. Which of the four activities is a product-level activity?

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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Required information
[The following information applies to the questions displayed below.]
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 $664,200 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 Pool
Machining
Machine setups
Product design
General factory
Activity Measure
Machine-hours.
Number of setups
Activity Measure
Machine-hours
Number of setups
Number of products
Direct labor-hours
Estimated Overhead
Product Y Product Z
7,100
60
Number of products
3,900
150
1
Direct labor-hours
8,100
5,100
Cost
$ 221,100
$ 107,100
$ 85,000
$ 251,000
Expected Activity
11,000 MHS
210 setups
2 products
13,200 DLHS
8. Which of the four activities is a product-level activity?
Transcribed Image Text:! Required information [The following information applies to the questions displayed below.] 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 $664,200 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 Pool Machining Machine setups Product design General factory Activity Measure Machine-hours. Number of setups Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Estimated Overhead Product Y Product Z 7,100 60 Number of products 3,900 150 1 Direct labor-hours 8,100 5,100 Cost $ 221,100 $ 107,100 $ 85,000 $ 251,000 Expected Activity 11,000 MHS 210 setups 2 products 13,200 DLHS 8. Which of the four activities is a product-level activity?
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