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Problem $4-18$ Contrasting Activity$-$Based Costing and Conventional Product Costing $[$LO$4-2,$ LO$4-3,$ LO$4-4]$

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Adria 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 company$$s five activity cost pools:

Activity Cost Pool Activity

Measure Expected

Overhead Cost Expected

Activity

Labor$-$related Direct labor$-$hours $ $34,0008,500$ DLHs

Purchase orders Number of orders $ $3,5003,500$ orders

Material receipts Number of receipts $ $9,000900$ receipts

Relay assembly Number of relays $ $15,0002,500$ relays

General factory Machine$-$hours $ $205,00041,000$ MHs

Problem $4-18$ Part $2$

$2.$ The expected activity for the year was distributed among the company$$s four products as follows:

Expected Activity

Activity Cost Pool Product A Product B Product C Product D

Labor$-$related $($DLHs$)2,5506503,4001,900$

Purchase orders $($orders$)2505001,7501,000$

Materials receipts $($receipts$)3101764140$

Relay assembly $($relays$)2002001,0001,100$

General factory $($MHs$)12,7508,3008,20011,750$

Using the ABC data, determine the total amount of overhead cost assigned to each product.

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