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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
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 Expected Overhead Cost $231,600 $15,015 231 orders 112 part types 1,780 boards 20,500 MHs Activity Measure Direct labor-hours Expected Activity 38,600 DLHS Number of orders Number of part types $ 95,200 Board etching ok General factory Number of boards Machine-hours $ 106,800 $ 184,500 * Required: 1. Compute the activity rate for each of the activity cost pools W 2. The expected activity for the year was distributed among the company's four products as follows: inces Activity Cost Pool Expected Activity Product A Product B Product C Product D Labor-related (DLHS) 4,500 26,600 3,500 4,000 Purchase orders (orders) 70 37 32 92 Parts management (part types) 32 19 48 13 Board etching (boards) General factory (MHS) 360 4,000 790 630 7,700 2,000 6,000 Using the ABC data, determine the total amount of overhead cost assigned to each product t Required 1 Required 2 inces Compute the activity rate for each of the activity cost pools. Activity Cost Pool Activity Rate per DLH Labor-related Purchase orders Parts management Board etching General factory per order per part type per board per MH Required 1 Required 2 Using the ABC data, determine the total amount of overhead cost assigned to each product. Activity Cost Pool Overhead Cost Overhead Cost Overhead Cost Overhead Cost Assigned Product A Assigned Product B Assigned Product C Assigned Product D Labor-related (DLHS) Purchase orders (orders) Parts management (part types) Board etching (boards) General factory (MHS) Total $ 0 $ 0 $ 0 $ 0
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