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:

Exercise 3-5 Assigning Overhead to Products in ABC CLO3-2, 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 Expected Measure Overhead Expected Activity Activity Cost Pool Cost 284,000 Labor-related Direct labor-hours 35,500 DLHs 6,790 194 orders Purchase orders Number of orders Parts management Number of part types 71,340 82 part types Board etching 57,900 1,930 boards Number of boards 229,900 20,900 MHs General factory Machine-hours Required: 1. Compute the activity rate for each of the activity cost pools. Activity Rate Activity Cost Pool Labor-related per DLH per order Purchase orders Parts management per part type Board etching per board per MH General factory