Question

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 Measure Expected Overhead Expected Activity Activity Cost Pool Labor-related Purchase orders Parts management Cost Direct labor-hours Number of orders Number of part types S 284,000 35,500 DLHs $ 6,790 S 194 orders 71,340 82 part types Number of boards Machine-hours S 57,900 $ 229,900 20,900 MH:s 1,930 boards Board etching General factory Required 1. Compute the activity rate for each of the activity cost pools ctivity 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 3,000 43 Product B 22,800 20 15 750 7,300 Product C 3,900 48 32 650 3,900 Product D 5,800 83 530 3,600 6,100 Using the ABC data, determine the total amount of overhead cost assigned to each product. Overhead Cost Assigned Product B Activity Cost Pool Product A Product C Product D Labor-related (DLHs) Purchase orders (orders) Parts management (part types) Board etching (boards) General factory (MHs) Total

Answer 1