Question
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 Expected Activity 38,000 DLHS $ 380,000 $11,935 $ 79,500 $ 93,000 $ 240,500 217 orders 106 part types 1,860 boards 18,500 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: Expected Activity Activity Cost Pool Labor-related (DLH) Purchase orders (orders) Parts management (part types) Board etching (boards) Product A 5,400 Product B Product C 24,700 3,800 Product D 4,100 51 35 48 83 35 14 42 15 590 2,600 730 540 8 8,600 2,000 5,300 General factory (MHS) Using the ABC data, determine the total amount of overhead cost assigned to each product.
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