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[The following information applies to the questions displayed below.] Rusties Company recently implemented an activity-based costing system. At the beginning of the year, management made
[The following information applies to the questions displayed below.]
Rusties Company recently implemented an activity-based costing system. At the beginning of the year, management made the following estimates of cost and activity in the companys five activity cost pools:
Activity Cost Pool | Activity Measure | Expected Overhead Cost | Expected Activity | |
---|---|---|---|---|
Labor-related | Direct labor-hours | $ 24,912 | 2,076 | DLHs |
Purchase orders | Number of orders | $ 1,070 | 535 | orders |
Product testing | Number of tests | $ 4,550 | 325 | tests |
Template etching | Number of templates | $ 770 | 35 | templates |
General factory | Machine-hours | $ 52,500 | 10,500 | MHs |
2. The expected activity for the year was distributed among the companys four products as follows:
Activity Cost Pool | Expected Activity | |||
---|---|---|---|---|
Product A | Product B | Product C | Product D | |
Labor-related (DLHs) | 750 | 126 | 600 | 600 |
Purchase orders (orders) | 30 | 165 | 150 | 190 |
Product testing (tests) | 200 | 50 | 0 | 75 |
Template etching (templates) | 0 | 17 | 15 | 3 |
General factory (MHs) | 3,900 | 2,200 | 1,500 | 2,900 |
Using the ABC data, determine the total amount of overhead cost assigned to each product.
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