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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 Activity Measure Direct labor-hours Number of orders Number of part types Number of boards Machine-hours Expected Overhead Cost $ 142,500 $ 15,535 $ 65,450 $ 105,600 $ 144,000 Expected Activity 28,500 DLHS 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: Activity Cost Pool Labor-related (DLHS) Purchase orders (orders) Parts management (part types) Board etching (boards) General factory (MHS) Product A 6,700 66 Expected Activity Product B 13,000 28 4,100 48 Product C Product D 4,700 97 27 510 3,700 12 720 7,500 32 14 530 2,500 0 4,300 Using the ABC data, determine the total amount of overhead cost assigned to each product.
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