Answer
Y: 50%;
Z: 50%
Work Step by Step
Total overhead cost for Machining: 84,000
Using the ABC system, percentage of the Machining costs assigned to Product Y: $\frac{42,000}{84,000} \times 100 = 50$%
Percentage allocated to Product Z: $100−50=50$%
Under the ABC system, 50% of the Product Design cost is allocated to each product, whereas the plantwide approach allocates 67% and 33% of all overhead costs to Products Y and Z, respectively. These percentages are different because Product Design is a product-level cost pool. Although Product Y is the high volume product (14,000 units) and Product Z is the low-volume product (6,000 units), both products consume 50% of the product design resources. The conventional system is allocating too much of the product design costs to Product Y and too little of these costs to Product Z
