The company uses a plantwide overhead rate based on direct labor-hours. Using the plantwide overhead rate, how much manufacturing overhead cost is allocated to Product Y and Product Z? Explanation 3. Explanation 4. Explanation 5. Explanation 6. Machine setups is a batch-level activity. A setup is performed to run a batch of units. The cost of the setup is determined by the resources consumed performing the setup and it is not influenced by the number of units processed once the setup is complete.

The product design activity is a product-level activity. The product design cost is determined by the number of products supported and it is not influenced Hickory Company Manufactures Two Products the number of batches or units processed. Explanation 9. Explanation The proprietor Hickory Company Manufactures Two Products the company believes that costs are driven primarily by the size of customer lawns, the size of customer garden beds, the distance to travel to customers, and the number of customers.

In addition, the costs of maintaining garden beds depends on whether the beds are low maintenance beds mainly ordinary trees and shrubs or high maintenance beds mainly flowers and exotic plants. Accordingly, the Hickory Company Manufactures Two Products uses the five activity cost Vesta Logistics Company listed below: Activity Cost Pool Activity Measure Caring for lawn Square feet of lawn Caring for garden beds—low maintenance Square feet of low maintenance beds Caring for garden beds—high maintenance Square feet of high maintenance beds Travel to jobs Miles Customer billing and service Number of customers.

Required: Compute the activity rate for each of the activity cost pools. Round your answers to 2 decimal places except customer billing and service. The activity rate for each activity cost pool is computed by dividing its estimated overhead cost by its expected activity. Activity data have been supplied for the following two products: Total Expected Activity K M67 Number of units produced per year 2, Direct labor-hours 80 Machine-hours 1, Machine setups 1 4 Production orders 1 4 Shipments 1 Hickory Company Manufactures Two Products Product sustaining 1 1.

Required: How much total overhead cost would be assigned to K and M67 using the activity-based costing system? The company has a standard paraglider model, but also makes custom-designed paragliders.

Management would like an analysis of the profitability of a particular customer, Big Sky Outfitters, which has ordered the following products over the last 12 months: Standard Custom Model Design Number of gliders 20 3 Number of orders 1 3 Number of custom designs 0 3 Direct labor-hours per glider Round your intermediate calculations and final answer to the nearest whole dollar amount. The owner of the restaurant has been trying to better understand costs at the restaurant and has hired a student intern to conduct an activity-based costing study.

The above costs include all of the costs of the restaurant except for organization-sustaining costs such as rent, property taxes, and top-management salaries. Some costs, such as the cost of cleaning the linens that cover the restaurant's tables, vary with the number of parties served.

Other costs, such as washing plates and glasses, depend on the number of diners served or the number of drinks served. Prior to the activity-based costing study, the owner knew very little about the costs of the restaurant. According to the activity-based costing system, what is the total cost and average cost per diner for serving each of the following parties Red Car Company diners?

Round your intermediate calculations to 2 decimal places. Round your Total Cost final answers to 2 decimal places and your Average Cost final answers to 3 decimal places. According to the activity-based costing system, the cost of serving each of the parties can be computed as follows: a. The average cost per diner for each party can be computed by dividing the total cost of the party by the number of diners Hickory Company Manufactures Two Products the party as follows: a.

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Is this content inappropriate? Report this Document. Flag for inappropriate content. Download Now. Related titles. Carousel Previous Carousel Next. Jump to Page. Search inside document. Explanation 1. Explanation 2. What is the activity rate for the Machining activity cost pool? What is the activity rate for the Machine Setups activity cost pool?

What is the activity rate for the Product Design activity cost pool? What is the activity Hickory Company Manufactures Two Products for the General Factory activity cost pool? Which of the four activities is a batch-level activity? Which of the four activities is a product-level activity? Archie Lazaro. Arif Aminun Rahman.

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