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Exercise 4-5 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
Exercise 4-5 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: Expected Overhead Cost 156,000 11,000 $ 80,000 $90,000 $ 180,000 Activity Cost Pool Labor-related Purchase orders Activity Measure Direct labor-hours Number of orders Expected Activity 26,000 DLHS 220 orders Number of part types 100 part types 2,000 boards 20,000 MHs Parts management Board etching General factory Number of boards Machine-hours 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 Product A 6,000 Activity Cost Pool Labor-related (DLHs) Purchase orders (orders) Parts management (part types) Board etching (boards) General factory (MHs) Product B Product C Product D 4,000 40 5,000 11,000 60 30 90 3 15 40 15 500 900 600 3,000 8,000 3,000 6,000 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 Rate Activity Cost Pool per DLH Labor-related Purchase orders per order Parts management per part type Board etching per board General factory per MH
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