Answered step by step
Verified Expert Solution
Question
1 Approved Answer
! Required information (The following information applies to the questions displayed below.) Rusties Company recently implemented an activity-based costing system. At the beginning of the
! Required information (The following information applies to the questions displayed below.) Rusties 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 company's five activity cost pools: Activity Cost Pool Labor-related Purchase orders Product testing Template etching General factory Activity Measure Direct labor-hours Number of orders Number of tests Number of templates Machine-hours Expected Overhead Cost $16, 380 $ 1,920 $ 4,275 $ 805 $42,600 Expected Activity 1,260 DLHS 640 orders 285 tests 35 templates 7,100 MHS Required: 1. Compute the activity rate for each of the activity cost pools. Activity Cost Pool Labor-related Purchase orders Product testing Template etching General factory Activity Rate per DLH per order per test per template per MH Required information (The following information applies to the questions displayed below.) Rusties 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 company's five activity cost pools: Expected Overhead Expected Activity Cost Pool Activity Measure Cost Activity Labor-related Direct labor-hours $16,380 1,260 DLHS Purchase orders Number of orders $ 1,920 640 orders Product testing Number of tests $ 4,275 285 tests Template etching Number of templates 805 35 templates General factory Machine-hours $42,600 7,100 MHS $ 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) 600 60 300 300 Purchase orders (orders) 20 260 180 180 Product testing (tests) 160 60 65 Template etching (templates) 16 15 General factory (MH) 2,200 1,700 2,000 1,200 0 0 4 Using the ABC data, determine the total amount of overhead cost assigned to each product. Total Overhead Cost Product A Product B Product C Product D
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started