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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 Activity Measure Cost Expected Activity Labor-related Direct labor-hours $ 142,500 28,500 DLHS Purchase orders Number of orders $ 15,535 239 orders Parts management Number of part types $ 65, 450 85 part types Board etching Number of boards $ 195,600 1,760 boards General factory Machine-hours $ 144,000 18, 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: Activity Cost Pool Labor-related (DLHS) Purchase orders (orders) Parts management (part types) Board etching (boards) General factory (MHS) Expected Activity Product Product B Product Product D 6,760 13,000 4,100 4,700 66 28 48 97 27 12 14 510 720 530 0 3,700 7,500 2,500 4, 300 32 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 Rate per DLH Activity Cost Pool Labor-related Purchase orders Parts management Board etching General factory per order per part type 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 Activity Cost Pool Product A Product B Product C Product D Labor-reinted (DLHS) Purchase orders (orders) Parts management (part types) Board etching (bords) General factory (MHS) Total
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