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
$ 233,600
29,200
DLHs
Purchase orders
Number of orders
$ 9,360
234
orders
Parts management
Number of part types
$ 80,000
100
part types
Board etching
Number of boards
$ 59,850
1,710
boards
General factory
Machine-hours
$ 236,500
21,500
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:
Activity Cost Pool
Expected Activity
Product A
Product B
Product C
Product D
Labor-related (DLHs)
4,400
16,100
3,300
5,400
Purchase orders (orders)
74
29
50
81
Parts management (part types)
25
18
44
13
Board etching (boards)
430
750
530
0
General factory (MHs)
3,300
8,100
3,600
6,500
Using the ABC data, determine the total amount of overhead cost assigned to each product.
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