Problem 3-18A Contrasting Activity-Based Costing and Conventional Product Costing [LO3-2, LO3-3, LO3-4]

[The following information applies to the questions displayed below.]

Adria Company recently implemented an activity-based costing system. 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

$

66,500

9,500

DLHs

Purchase orders

Number of orders

$

15,200

3,800

orders

Material receipts

Number of receipts

$

10,200

850

receipts

Relay assembly

Number of relays

$

28,000

2,800

relays

General factory

Machine-hours

$

333,000

37,000

MHs

1.

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

Activity Cost Pool	Activity Rate
Labor-related		per DHL
Purchase orders		per order
Material Receipts		per receipt
Relay Assembly		per relay
General Factory		per MH

Problem 3-18A Part 2

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)	3,050	500	5,225	725
Purchase orders (orders)	300	650	1,710	1,140
Materials receipts (receipts)	360	133	357	0
Relay assembly (relays)	300	300	1,008	1,192
General factory (MHs)	15,250	100	7,400	14,250

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

Product A
Product B
Product C
Product D