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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 DLHS $ 231,600 38,600 Purchase orders Number of orders $ 15,015 231 orders Parts Number of part $ 95,200 112 part types management types Board etching Number of boards 106,800 boards 1,780 184,500 MHS 20,500 General factory Machine-hours $ Required: 1. 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: 1. 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 2. 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 4,500 26,600 3,500 4,000 70 37 32 92 19 48 13 360 790 630 0 4,000 7,700 2,800 6,000 32 Using the ABC data, determine the total amount of overhead cost assigned to each product. 2. 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 4,500 26,600 3,500 4,000 70 37 32 92 32 19 13 360 790 630 0 4,000 7,700 2,800 6,000 48 Using the ABC data, determine the total amount of overhead cost assigned to each product. Overhead Cost Assigned Product B Product C 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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