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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 its
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: |
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 Measure Expected Overhead Expected Activity DLHS Activity Cost Pool Cost 135,600 24 Labor-related Direct labor-hours 22,600 $ 8,400 $ 68,870 240 orders Purchase orders Number of orders Number of part types 97 part types Parts management $ 53,700 $171,000 Board etching General factory Number of boards Machine-hours 1,790 boards 19,000 MHs Requlred: 1. Compute the activity rate for each of the activity cost pools. Activity Rate Activity Cost Pool 6 per DLH Labor-related 35 per order Purchase orders 710 per part type Parts management Board etching 30 per board 9 per MH General factory %24 %24 The expected activity for the year was distributed among the company's four products 2. as follows: Expected Activity Activity Cost Pool Labor-related (DLHS) Product A Product B Product C Product D 4,000 100 3,000 11,900 3,700 Purchase orders (orders) Parts management (part 73 34 33 23 15 49 10 types) Board etching (boards) General factory (MHs) 480 770 540 6,000 5,900 3,600 3,500 Using the ABC data, determine the total amount of overhead cost assigned to each product. Overhead Cost Assigned Activity Cost Pool Product A Product B Product C Product D Labor-related (DLHS) Purchase orders (orders) Parts management (part types) Board etching (boards) General factory (MHs) Total
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