Fisher Company uses activity-based costing to determine product costs for external financial reports. At the beginning of the year, management made the following estimates of cost and activity in the companys five activity cost pools:

Activity Cost Pool	Activity Measure	Expected Overhead Cost		Expected Activity
Labor-related	Direct labor-hours	$	200,000	20,000	DLHs
Purchase orders	Number of orders	$	110,000	5,000	orders
Material receipts	Number of receipts	$	108,000	1,800	receipts
Relay assembly	Number of relays	$	960,000	12,000	relays
General factory	Machine-hours	$	1,260,000	70,000	MHs

eBook & Resources

eBook: USING ACTIVITY-BASED COSTING LO 2eBook: USING ACTIVITY-BASED COSTING LO 3eBook: USING ACTIVITY-BASED COSTING LO 4

6.

value: 3.00 points

Required information

Required:

1.	Compute the activity rate for each of the activity cost pools.

Activity Cost Pool	Activity Rate
Labor related	$	per DLH
Purchase orders	$	per order
Material receipts	$	per receipt
Relay assembly	$	per relay
General factory	$	per MH

References

eBook & Resources

WorksheetLearning Objective: 03-02 Compute activity rates for an activity-based costing system.Learning Objective: 03-04 Contrast the product costs computed under activity-based costing and conventional costing methods.

Difficulty: HardLearning Objective: 03-03 Compute product costs using activity-based costing.

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7.

value: 3.00 points

Required information

2.	The expected activity for the year was distributed among the companys four products as follows:

	Expected Activity
Activity Cost Pool	Product A	Product B	Product C	Product D
Labor related (DLHs)	7,000	1,000	8,000	4,000
Production orders (orders)	800	900	1,100	2,200
Materials receipts (receipts)	400	800	300	300
Relay assembly (relays)	3,500	2,000	3,000	3,500
General factory (MHs)	16,000	26,000	17,000	11,000

Using the ABC data, determine the total amount of overhead cost assigned to each product.

Product A	$
Product B	$
Product C	$
Product D	$