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Sultan Company uses an activity-based costing system. At the beginning of the year, the company...

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Accounting

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 Cost Pool Activity Measure Expected Overhead Cost Expected Activity
Labor-related Direct labor-hours $ 380,000 38,000 DLHs
Purchase orders Number of orders $ 11,935 217 orders
Parts management Number of part types $ 79,500 106 part types
Board etching Number of boards $ 93,000 1,860 boards
General factory Machine-hours $ 240,500 18,500 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 companys four products as follows:

Expected Activity
Activity Cost Pool Product A Product B Product C Product D
Labor-related (DLHs) 5,400 24,700 3,800 4,100
Purchase orders (orders) 51 35 48 83
Parts management (part types) 35 14 42 15
Board etching (boards) 590 730 540 0
General factory (MHs) 2,600 8,600 2,000 5,300

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

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