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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 Number of boards Machine-hours Expected Overhead Cost $158,800 Expected Activity 39,700 DLHS $ 11,605 $ 90,470 $ 99,000 $ 139,300 211 orders 109 part types 1,980 boards 19,900 MH 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 Lebor-related (DLH) Purchase orders (orders) Parts management (part types) Board etching (boards) General factory (MHE) Product A Expected Activity Product B Product C Product D 6,700 23,100 4,200 5,700 43 36 39 93 24 590 3,700 19 740 11,200 50 16 650 0 2,900 5,100 Using the ABC data, determine the total amount of overhead cost assigned to each product
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