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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 company's five activity cost pools: Expected Activity Cost Overhead Expected Pool Activity Measure Cost Activity Direct labor- Labor-related $22,125 1,475 DLHs hours Number of Purchase orders $ 2,375 475 orders orders Product testing Number of tests $ 4,640 290 tests Template Number of $ 810 etching 30 templates templates General factory Machine-hours $58,000 7,250 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 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 Activity Cost Overhead Expected Pool Activity Measure Cost Activity Direct labor- Labor-related $22,125 1,475 DLHS hours Number of Purchase orders $ 2,375 475 orders orders Product testing Number of tests $ 4,640 290 tests Template Number of $ 810 etching templates 30 templates General factory Machine-hours $58,000 7,250 MHS 2. The expected activity for the year was distributed among the company's four products as follows: Activity Cost Pool Labor-related (DLHS) Purchase orders (orders) Product testing (tests) Template etching (templates) General factory (MHS) Expected Activity Product Product Product Product A B D 475 200 400 400 100 55 150 170 170 60 0 60 0 16 10 4 2,100 1,450 1,600 2,100 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
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