Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribedimage text in transcribedimage text in transcribed

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 Expected Overhead Cost $ 142,500 Expected Activity 28,500 DLHS $ 15,535 $ 65,450 $ 105,600 $ 144,000 239 orders 85 part types 1,760 boards 18,000 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 company's four products as follows: Expected Activity Activity Cost Pool Labor-related (DLHS) Purchase orders (orders) Parts management (part types) Board etching (boards) General factory (MHS) Product A Product B Product C Product D 6,700 13,000 4,100 4,700 66 28 48 97 27 12 32 14 510 3,700 720 530 0 7,500 2,500 4,300 Using the ABC data, determine the total amount of overhead cost assigned to each product. Required 1 Required 2 Compute the activity rate for each of the activity cost pools. Activity Cost Pool Labor-related Purchase orders Activity Rate per DLH per order Parts management Board etching General factory per part type per board per MH Using the ABC data, determine the total amount of overhead cost assigned to each product. Overhead Cost Overhead Cost Overhead Cost Overhead Cost Activity Cost Pool Labor-related (DLHS) Purchase orders (orders) Parts management (part types) Board etching (boards) General factory (MHS) Total Assigned Product A Assigned Product B Assigned Product C Assigned Product D

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Introduction to Managerial Accounting

Authors: Peter Brewer, Ray Garrison, Eric Noreen

7th edition

978-1259675539, 125967553X, 978-1259594168, 1259594165, 78025796, 978-0078025792

More Books

Students also viewed these Accounting questions