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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 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 $ 311,500 $ 8,840 $ 71,280 $ 63,700 $ 148,000 Expected Activity 44,500 DLHS 221 orders 99 part types 1,820 boards 14,800 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 Product A Product B Product C Product D 6,800 27,300 4,600 5,800 51 17 33 500 550 2,100 6,300 2,400 4,000 29 49 Activity Cost Pool Labor-related (DLHS) Purchase orders (orders) Parts management (part types) Board etching (boards) General factory (MHS) 92 34 15 770 Using the ABC data, determine the total amount of overhead cost assigned to each product. Activity Cost Pool Activity Rate Labor-related per DLH Purchase orders per order Parts management per part type Board etching per board General factory per MH Overhead Cost Assigned Product B Product Product A Product 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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