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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 Cost Pool | Activity Measure | Expected Overhead Cost | Expected Activity | |
---|---|---|---|---|
Labor-related | Direct labor-hours | $ 156,000 | 26,000 | 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 |
The expected activity for the year was distributed among the companys four products as follows:
Activity Cost Pool | Expected Activity | |||
---|---|---|---|---|
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 | 0 |
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.
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