Please show steps on how to calculate. Thank you! Required information Greenwood

Question

Please show steps on how to calculate. Thank you!

Required information Greenwood 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: Estimated Overhead Expected Activity Activity Cost Pool Machining Machine setups Production desiqn General factory Activity Measure Machine-hours Number of setups Number of products Direct labor-hours Cost $ 231,600 12,000 MHs $ 55,900 $ 77,000 130 setups 2 products 364,500 15,000 DLHs Activity Measure Machining Number of setups Number of products Direct labor-hours Product Y 7,300 Product 4,700 90 40 7,300 7,700 13. Using the ABC system, what percentage of Machine Setups cost is assigned to Product Y and Product Z? (Round your intermediate calculations to 2 decimal places. Round your answers to 2 decimal places.) Product Y Product Z Machine setups cost

Explanation / Answer

Solution:

Machine setups cost = $55,900

Number of setups = 130

Machine setups cost assigned to Product Y = $55900 *40/130 = $17,200

Machine setups cost assigned to Product Z = $55900 *90/130 = $38,700

Percentage of Machine setups cost assigned to Product Y = $17200 / $55900 = 30.77%

Percentage of Machine setups cost assigned to Product Z = $38700 / $55900 = 69.23%

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