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Hickory Company manufactures two productsâ13,000 units of Product Y and 5,000 units of Product Z. The company uses a plantwide...
Hickory Company manufactures two products—13,000 units of Product Y and 5,000 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: (The total estimated overhead cost may not agree with the sum of allocated overhead costs to each product.)
Activity Cost PoolActivity MeasureEstimated Overhead CostExpected Activity Machining Machine-hours$235,200 12,000 MHs Machine setups Number of setups$73,600 160 setups Production design Number of products$80,000 2 products General factory Direct labor-hours$295,200 12,000 DLHsActivity MeasureProduct YProduct Z Machining6,600 5,400 Number of setups40 120 Number of products1 1 Direct labor-hours7,600 4,400 Required:Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Y? (Round your intermediate calculations to 2 decimal places and final answers to the nearest dollar amount.) Total manufacturing overhead cost$