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Required information Skip to question [The following information applies to the questions displayed below.] Rusties Company recently implemented an activity-based costing system. At the beginning
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[The following information applies to the questions displayed below.]
Rusties Company recently implemented an activity-based costing system. At the beginning of the year, management made the following estimates of cost and activity in the companys five activity cost pools:
Activity Cost Pool | Activity Measure | Expected Overhead Cost | Expected Activity | |
---|---|---|---|---|
Labor-related | Direct labor-hours | $ 24,905 | 1,465 | DLHs |
Purchase orders | Number of orders | $ 840 | 420 | orders |
Product testing | Number of tests | $ 7,600 | 400 | tests |
Template etching | Number of templates | $ 1,080 | 40 | templates |
General factory | Machine-hours | $ 46,750 | 9,350 | MHs |
2. The expected activity for the year was distributed among the companys four products as follows:
Activity Cost Pool | Expected Activity | |||
---|---|---|---|---|
Product A | Product B | Product C | Product D | |
Labor-related (DLHs) | 500 | 165 | 400 | 400 |
Purchase orders (orders) | 30 | 70 | 140 | 180 |
Product testing (tests) | 240 | 65 | 0 | 95 |
Template etching (templates) | 0 | 27 | 10 | 3 |
General factory (MHs) | 3,400 | 1,550 | 1,500 | 2,900 |
Using the ABC data, determine the total amount of overhead cost assigned to each product.
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