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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 Measure Expected Overhead Cost Expected Activity Activity Cost Pool 380,000 38,000 DLHs Labor-related Purchase orders Parts management Number of part types79,500 Direct labor-hours Number of orders 217 orders 106 part types $ 11,935 Board etching General factory Number of boards Machine hours s 93,000 1,860 boards $ 240,500 18,500 MHs Required 1. Compute the activity rate for each of the activity cost pools. Activity Cost Pool Labor-related Purchase orders Parts management Board etching General factory Activity Rate per DLH per order per part type per board per MH 2. The expected activity for the year was distributed among the company's four products s follows: Expected Activity Activity Cost Pool Labor-related (DLHs) Purchase orders (orders) Parts management (part types) Board etching (boards) General factory (MHs) Product A 5,400 51 35 590 2,600 Product B 24,700 35 14 730 8,600 Product C 3,800 48 42 540 2,000 Product D 4,100 83 15 5,300 Using the ABC data, determine the total amount of overhead cost assigned to each product. Overhead Cost Assigned Activity Cost Pool Product A Product B Product C Product D Labor-related (DLHs) Purchase orders (orders) Parts management (part types) Board etching (boards) General factory (MHs) Total
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