Question
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 | Activity Measure | Expected Overhead Cost | Expected Activity | ||||
Labor-related | Direct labor-hours | $ | 269,100 | 29,900 | DLHs | ||
Purchase orders | Number of orders | $ | 11,000 | 220 | orders | ||
Parts management | Number of part types | $ | 78,440 | 106 | part types | ||
Board etching | Number of boards | $ | 85,050 | 1,890 | boards | ||
General factory | Machine-hours | $ | 242,400 | 20,200 | MHs | ||
Required:
1. Compute the activity rate for each of the activity cost pools.
2. The expected activity for the year was distributed among the companys four products as follows:
Compute the activity rate for each of the activity cost pools.
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Compute the activity rate for each of the activity cost pools.
Using the ABC data, determine the total amount of overhead cost assigned to each product.
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