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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 Expected Overhead Cost $ 233,600 $ 9,360 Number of part types Number of boards Machine-hours $ 80,000 $ 59,850 $ 236,500 Expected Activity 29,200 DLHS 234 orders 100 part types 1,710 boards 21,500 MHs 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: Activity Cost Pool Labor-related (DLHS) Purchase orders (orders) Parts management (part types) Board etching (boards) Expected Activity Product A Product B Product C Product D 4,400 16,100 3,300 5,400 74 29 50 81 25 18 44 13 430 750 530 3,300 8,100 3,600 6,500 General factory (MHS) Using the ABC data, determine the total amount of overhead cost assigned to each product.
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