Exercise 3-5 Assigning Overhead to Products in ABC [LO3-2, LO3-3] Sultan Company uses an activity-based costing system. At the beginning of the year, the company made the following estimates of cost and activity for its five activity cost pools: Activity Cost Pool Activity Measure Expected Overhead Cost Expected Activity Labor-related Direct labor-hours $ 254,800 36,400 DLHs Purchase orders Number of orders $ 8,785 251 orders Parts management Number of part types $ 72,680 92 part types Board etching Number of boards $ 54,900 1,830 boards General factory Machine-hours $ 170,000 17,000 MHs -------------------------------------------------------------------------------- Required: 1. Compute the activity rate for each of the activity cost pools. 2. The expected activity for the year was distributed among the companys four products as follows: Expected Activity -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Activity Cost Pool Product A Product B Product C Product D Labor-related (DLHs) 4,000 22,200 4,900 5,300 Purchase orders (orders) 78 28 50 95 Parts management (part types) 37 12 31 12 Board etching (boards) 530 700 600 0 General factory (MHs) 3,200 6,000 2,100 5,700 -------------------------------------------------------------------------------- Using the ABC data, determine the total amount of overhead cost assigned to each product.