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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 $ 148,000 15,180 $ 85,680 $ 99,550 $ 162,400 Expected Activity 29,600 DLHs 253 orders 102 part types 1,810 boards 20,300 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: Activity Cost Pool Labor-related (DLHs) Purchase orders (orders) Parts management (part types) Board etching (boards) General factory (MHS) Product A 7,900 75 30 420 3,200 Expected Activity Product B Product C 12,800 3,900 39 45 13 41 780 610 8,200 3,600 Product D 5,000 94 18 0 5,300 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 Activity Rate per DLH Labor-related Purchase orders per order per part type Parts management Board etching General factory per board per MH Required 1 Required 2 Using the ABC data, determine the total amount of overhead cost assigned to each product. Overhead Cost Assigned Product A Product B Product C Product D Activity Cost Pool Labor-related (DLHS) Purchase orders (orders) Parts management (part types) Board etching (boards) General factory (MHs) Total $ 0 $ 0 $ 0 $ 0
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