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Hunter Corporation uses ABC to determine product costs for external financial reports. At the beginning of the year, management made the following cost and activity
Hunter Corporation uses ABC to determine product costs for external financial reports. At the beginning of the year, management made the following cost and activity estimates in the company's five activity cost pools: Activity Cost Pool Labour related Production orders Materials receipts Relay assembly Ceneral factory Activity Measure Direct labour-hours Number of orders Number of receipts Number of relays Machine-hours Estinated Overhead Cost $ 161,500 63,250 Expected Activity 34,000 DLH 1,150 orders 162,500 1,300 receipts 154,000 472,500 $1,013,750 5,500 relays 52,500 MH Required: 1. Compute the activity rate (ie., predetermined overhead rate) for each of the activity cost pools. (Round your answers to 2 decimal places.) Activity Cost Pool Activity Rate Labour related per DLH Production orders per order Material receipts Relay assembly General factory per receipt per relay per MH 3. The actual activity for the year was distributed among the company's four products as follows: Activity Cost Pool Actual Activity Product A Product B Product C Labour related 36,000 DLBS 9,100 12,500 4,000 Product D 10,400 Production orders 1,100 orders 250 315 205 330 Materials receipts 1,450 receipts 110 510 270 560 Relay assembly 5,400 relays 2,025 0 3,375 General factory 53,550 MH 11,400 15,800 12,300 14,050 a. Determine the total amount of overhead cost applied to each product. (Do not round intermediate calculations.) Total Overhead Cost Product A Product B Product C Product D b. Does the total amount of overhead cost applied to the products above tie in to the T-accounts in any way? O Yes SONO
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