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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: Activity Expected Measure Overhead Expected Activity Cost Pool Cost Activity Labor-related Direct labor-hours $380,000 38.000 DLHS Purchase orders Number of orders $11.935 217 orders Parts Number of part $ 79,500 1 06 part types management types Board etching Number of boards $93.000 1,860 boards General factory Machine-hours $240,500 18.500 MHS Required: 1. Compute the activity rate for each of the activity cost pools. Activity Cost Pool Labor-related Purchase orders Activity Rate per DLH per order Parts management per part type per board Board etching General factory per MH The expected activity for the year was distributed among the company's four products as follows: Expected Activity Activity Cost Pool Labor-related (DLHS) Purchase orders (orders) Parts management (part types) Board etching (boards) General factory (MHS) Product A Product B Product C Product D 5.400 24,700 3,800 4.100 35 48 83 - 35 14 42 15 590 730 540 2,600 8,600 2,000 5,300 Using the ABC data, determine the total amount of overhead cost assigned to each product. Overhead Cost Assigned Product B Product C Product A P roduct D Activity Cost Pool Labor-related (DLHS) Purchase orders (orders) Parts management (part types) Board etching (boards) General factory (MHS) Total
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