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 $ 156,000 26,000 DLHs Purchase orders Number of orders $ 11,000 220 orders Parts management Number of part types $ 80,000 100 part types Board etching Number of boards $ 90,000 2,000 boards General factory Machine-hours $ 180,000 20,000 MHs
2. 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) 6,000 11,000 4,000 5,000 Purchase orders (orders) 60 30 40 90 Parts management (part types) 30 15 40 15 Board etching (boards) 500 900 600 0 General factory (MHs) 3,000 8,000 3,000 6,000 Using the ABC data, determine the total amount of overhead cost assigned to each product.
Using the ABC data, determine the total amount of overhead cost assigned to each product
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