70.2K
Verified Solution
Link Copied!
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 | $ | 158,800 | | 39,700 | | DLHs |
| Purchase orders | Number of orders | $ | 11,605 | | 211 | | orders |
| Parts management | Number of part types | $ | 90,470 | | 109 | | part types |
| Board etching | Number of boards | $ | 99,000 | | 1,980 | | boards |
| General factory | Machine-hours | $ | 139,300 | | 19,900 | | 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) | | 6,700 | | | 23,100 | | | 4,200 | | | 5,700 | |
| Purchase orders (orders) | | 43 | | | 36 | | | 39 | | | 93 | |
| Parts management (part types) | | 24 | | | 19 | | | 50 | | | 16 | |
| Board etching (boards) | | 590 | | | 740 | | | 650 | | | 0 | |
| General factory (MHs) | | 3,700 | | | 8,200 | | | 2,900 | | | 5,100 | |
| |
Using the ABC data, determine the total amount of overhead cost assigned to each product.
Answer & Explanation
Solved by verified expert
