Hickory Company manufactures two products—14,000 units of Product Y and 6,000 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 $748,800 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 | Activity Measure | Estimated Overhead Cost | Expected Activity | ||
| Machining | Machine-hours | $ | 206,000 | 10,000 | MHs |
| Machine setups | Number of setups | $ | 145,600 | 260 | setups |
| Product design | Number of products | $ | 90,000 | 2 | products |
| General factory | Direct labor-hours | $ | 307,200 | 12,000 | DLHs |
| Activity Measure | Product Y | Product Z |
| Machine-hours | 7,600 | 2,400 |
| Number of setups | 50 | 210 |
| Number of products | 1 | 1 |
| Direct labor-hours | 8,600 | 3,400 |
1-1. What is the company’s plantwide overhead rate?
1-2. Using the plantwide overhead rate, how much manufacturing overhead cost is allocated to Product Y and Product Z?
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1-3. What is the activity rate for the Machining activity cost pool?
2-1. What is the activity rate for the Machine Setups activity cost pool?
2-2. What is the activity rate for the Product Design activity cost pool?
2-3. What is the activity rate for the General Factory activity cost pool?
