Exercise 4-5 Assigning Overhead to Products in ABC [LO4-2, LO4-3] Sultan Company uses an activity-based costing systorn. At the beginning of the year, the company made the following estimates of cost and activity for its five activity cost pools Expected Activity Cost Pool Activity Measure Overhead Cost Expected Activity Labor-related Direct labor hours $ 233,600 29,200 DLHS Purchase orders Number of orders $ 9,360 234 orders Parts management Number of part types $ 80,000 100 part types Board etching Number of boards $ 59,850 1,710 boards General factory Machine-hours $ 236,500 21,500 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 A Product B Product C Product D Labor-related (DLHs) 4.400 16,100 3,300 5,400 Purchase orders (orders) 74 29 50 81 Parts management (part types) 25 44 13 Board etching (boards) 430 750 530 0 General factory (MH) 3,300 8,100 3,600 6,500 18 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 Board etching General factory Activity Rate per DLH per order per part type per board per MH Required 2 > Sultan Company uses an activity-based costing systern. At the beginning of the year, the company made the following estimates of cost and activity for its five activity cost Expected Activity Cost Podl Activity Measure Overhead Cost Expected Activity Labor-related Direct labor hours $ 233,800 29,200 DLHs Purchase orders Number of orders $ 9,360 234 orders Parts management Number of part types $ 80,000 100 part types Bond etching Number of boards $ 50,850 1,710 boards General factory Machine-hours $ 236,500 21.500 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 A Product B Product C Product D Labor-related (DLHs) 4,400 16,100 3,300 5,400 Purchase orders (orders) 74 29 50 81 Parts management (part types) 25 18 13 Board etching (boards) 430 750 530 0 General factory (MH) 3,300 8,100 3,600 6,500 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 Using the ABC data, determine the total amount of overhead cost assigned to each product. Overhead Cost Assigned Product B Product C Product A Product D Activity Cost Pool Labor-related (DLHS) Purchase orders (orders) Parts management (part types) Board etching (boards) General factory (MH) Total Required 1
