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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 Board etching General factory Required: Activity Measure Direct labor-hours Number of orders Number of part types Number of boards Machine-hours Expected Overhead Cost $ 314,000 $10,215 $ 98,790 $70,000 $223,600 1. Compute the activity rate for each of the activity cost pools. Expected Activity 31,400 DLHS 227 orders 111 part types 1,770 boards 17,200 MH 2. The expected activity for the year was distributed among the company's four products as follows: Activity Cost Pool Product A Expected Activity Product B Product C Product D Labor-related (DLM) 5,000 Purchase orders (orders) 54 Parte management (part types) 40 16,800 33 15 4,000 41 5,600 99 43 13 board etching (boards) General factory (Mis) 460 3,900 700 6,100 610 0 2,900 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 Parts management Activity Rate per DLH per order per part type Board etching per board General factory per MH Required 1 Required 2 > Required 1 Required 2 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 Required 1 Required 2
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