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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: Expected Activity Cost Pool Activity Measure Overhead Cost Expected Activity Labor-related Direct labor-hours $ 156,000 26,800 DLHS Purchase orders Number of orders $ 11,000 220 orders Parts management Number of part types $ 80,000 100 part types Board etching Number of boards $ 90,000 2,000 boards General factory Machine-hours $ 180,000 20,000 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: Expected Activity Activity Cost Pool Product A Product B Product C Product D Labor-related (DLHS) 6,000 11,000 4,000 5,000 Purchase orders (orders) 60 30 40 90 Parts management (part types) 30 15 40 15 Board etching (boards) 500 900 600 @ General factory (MHS) 3,000 8,000 3,000 6,000 Using the ABC data, determine the total amount of overhead cost assigned to each product. Required 1 Required 2 Compute the activity rate for each of the activity cost pools. Activity Cost Pool Labor-related Purchase orders Parts management Board etching General factory Activity Rate per DLH per order per part type per board per MH Required Required 2 >
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