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Exercise 4-5 (Static) 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
Exercise 4-5 (Static) 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 Activity Cost Pool Labor-related (DLHS) Activity Measure Direct labor-hours Number of orders Number of part types Number of boards Machine-hours Required 1 Required 2 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: Activity Cost Pool Expected Overhead Cost $ 156,000 $ 11,000 $ 80,000 $ 90,000 $ 180,000 Labor-related Purchase orders Parts management Board etching General factory Product A 6,000 4,000 Purchase orders (orders) - 60 40 Parts management (part types) 30 40 Board etching (boards) 500 600 General factory (MHs) 3,000 3,000 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. Compute the activity rate for each of the activity cost pools. Activity Rate per DLH per order per part type per board per MH
Exercise 4-5 (Static) 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: 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: 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. Compute the activity rate for each of the activity cost pools. Using the ABC data, determine the total amount of overhead cost assigned to each productStep by Step Solution
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