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Exercise 4-5 (Algo) Assigning Overhead to Products in ABC [LO4-2, LO4-3] Sultan Company uses an activity-based costing system. At the beginning of the year,
Exercise 4-5 (Algo) Assigning Overhead to Products in ABC [LO4-2, LO4-3] 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 Labor-related Purchase orders Parts management Board etching. General factory Required: Activity Measure Direct labor-hours Number of orders Number of part types Expected Overhead Cost $ 148,000 Expected Activity 29,600 DLHS $ 15,180 253 orders $ 85,680 Number of boards Machine-hours. $ 99,550 $ 162,400 102 part types 1,810 boards 20,300 MHS 1. Compute the activity rate for each of the activity cost pools. 2. The expected activity for the year was distributed among the company's four products as follows: Activity Cost Pool Expected Activity Product A Product 8 Product C Product D Labor-related (DLHS) 7,900 12,800 3,900 5,000 Purchase orders (orders) 75 39 45 94 Parts management (part types) 30 13 41 18 Board etching (boards) 420 780 610 0 General factory (MHS) 3,200 8,200 3,600 5,300 Using the ABC data, determine the total amount of overhead cost assigned to each product Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the activity rate for each of the activity cost pools. Activity Cost Pool Labor-related Purchase orders Parts management Activity Rate: per DLH per order Board etching General factory per part type per board! per MH Required 1 Required 2 >
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