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Exercise 4-5 Assigning Overhead to Products in ABC (LO4-2, L04-3) Sultan Company uses an activity-based costing system. At the beginning of the year, the company
Exercise 4-5 Assigning Overhead to Products in ABC (LO4-2, L04-3) 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: Expected Overhead Activity Cost Pool Activity Measure Cost Expected Activity Labor-related Direct labor-hours $ 311,500 44,500 DLHS Purchase orders Number of orders $ 8,840 221 orders Parts management Number of part types $ 71,280 99 part types Board etching Number of boards $ 63,700 1,820 boards General factory Machine-hours $ 148,000 14,800 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 company's four products as follows: Expected Activity Activity Cost Pool Product Product B Product C Product D Labor-related (DLHS) 6,800 27,300 4,600 5,800 Purchase orders (orders) 51 29 49 92 Parts management (part types) 34 17 33 15 Board etching (boards) 500 770 550 General factory (MHS) 2,100 6,300 2,400 4,000 0 Using the ABC data, determine the total amount of overhead cost assigned to each product
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