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Sultan Company uses an activity-based costing system. At the beginning of the year, the company made the following estimates of cost and activity for its
Sultan Company uses an activity-based costing system. At the beginning of the year, the company made the following estimates of cost and activity for its five activity cost pools: Activity Cost Pool Labor-related Purchase orders Parts management Board etching General factory Activity Measure Direct labor-hours Number of orders Number of part types Number of boards Machine-hours Required 1 Required 2 Expected Overhead Cost $ 231,600 $ 15,015 $ 95,200 $ 106,800 $ 184,500 Required: 1. Compute the activity rate for each of the activity cost pools. 2. The expected activity for the year was distributed among the company's four products as follows: Activity Cost Pool Product A 4,500 70 32 360 4,000 Labor-related Activity Cost Pool Labor-related (DLHS) 3,500 Purchase orders (orders) 32 Parts management (part types) 48 Board etching (boards) 630 General factory (MHS) 2,800 Using the ABC data, determine the total amount of overhead cost assigned to each product. Complete this question by entering your answers in the tabs below. Compute the activity rate for each of the activity cost pools. Activity Rate per DLH Product B 26,600 Expected Activity 38,600 DLHs 231 orders 112 part types Expected Activity 37 19 790 7,700 1,780 boards 20,500 MHS Product C Product D 4,000 92 13 0 6,000
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