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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 Overhead Activity Cost Pool Labor-related Expected Activity 30,800 DLHs Activity Measure Cost $ 184,800 6,900 81,120 45,000 $ 150,300 Direct labor-hours Purchase orders Number of orders 230 orders Number of part types Parts management Board etching General factory 104 part types 1,800 boards 16,700 MHs Number of boards S Machine-hours 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 Labor-related (DLHs) Purchase orders (orders) Parts management (part types) Board etching (boards) General factory (MHs) Product A Product B Product C Product D 7,000 14,300 26 4,400 46 5,100 100 58 30 37 18 19 720 0 500 580 3,600 6,400 2,100 4,600 Using the ABC data, determine the total amount of overhead cost assigned to each product. Required 2 Required 1 Compute the activity rate for each of the activity cost pools. Activity Cost Pool Activity Rate Labor-related Purchase orders Parts management per DLH per order per part type 6 30 $ 780 $ Board etching per board 25 General factory per MH Required 2 Required A Required 1 Required 2 Using the ABC data, determine the total amount of overhead cost assigned to each product. Overhead Cost Assigned Product C Activity Cost Pool Product A Product B Product D Labor-related (DLHs) Purchase orders (orders) Parts management (part types) Board etching (boards) General factory (MHs) Total 0 0 0
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