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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
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 companys five activity cost pools: |
Activity Cost Pool | Activity Measure | Expected Overhead Cost | Expected Activity | ||
Labor-related | Direct labor-hours | $ | 19,250 | 1,375 | DLHs |
Purchase orders | Number of orders | $ | 1,820 | 455 | orders |
Product testing | Number of tests | $ | 6,320 | 395 | tests |
Template etching | Number of templates | $ | 960 | 40 | templates |
General factory | Machine-hours | $ | 68,600 | 9,800 | MHs |
The expected activity for the year was distributed among the companys four products as follows: |
Activity Cost Pool | Expected Activity | |||
Product A | Product B | Product C | Product D | |
Labor-related (DLHs) | 650 | 125 | 300 | 300 |
Purchase orders (orders) | 20 | 65 | 180 | 190 |
Product testing (tests) | 250 | 65 | 0 | 80 |
Template etching (templates) | 0 | 26 | 10 | 4 |
General factory (MHs) | 3,800 | 2,000 | 1,200 | 2,800 |
Using the ABC data, determine the total amount of overhead cost assigned to each product. | |
Product A Product B Product C Product D |
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