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 Cost Pool Labor-related Purchase orders Parts management Board etching General factory Activity Measure Direct labor-hours Number of orders Number of part types Number of boards Machine-hours Expected Overhead Cost $ 284.000 $ 6,790 $ 71,340 $ 57,900 $ 229,900 Expected Activity 35,500 DLHS 194 orders 82 part types 1.930 boards 20,900 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 company's four products as follows: Product 3,000 Expected Activity Product Product 22,800 3.900 Product D 5.800 Activity Cost Pool Labor-related (DLHS) Purchase orders (orders) Parts management (part types) Board etching (boards) Ceneral factory (MS) 43 20 15 13 530 3,600 750 7,300 650 3,900 6.100 Using the ABC data, determine the total amount of overhead cost assigned to each product. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the activity rate for each of the activity cost pools. Activity Cost Pool Activity Rate

Answer 1

Answer is given below

Labor-related Purchase order Parts management Board etching General factory $8.00 Per Direct labor hour $35.00 per order $870.00 per part type $30.00 per board $11.00 per machine hour working notes: Activity Cost pool Total Activities 35,500 194 Cost Pool $284,000 $6,790 $71,340 $57,900 $229,900 $649,930 Labor-related Purchase order Parts management Board etching General factory Total Overheads Activity Rate $8.00 Per Direct labor hour $35.00 per order $870.00 per part type $30.00 per board $11.00 per machine hour 82 1,930 20,900 Product A $24,000 $1,505 $19,140 $15,900 $39,600 $100,145 Labor-related(DLS) Purchase order (orders) Parts management (part types) Board etching (boards) General factory (MHS) Total Overhead cost assigned Product B Product C $182,400 $31,200 $700 $1,680 $13,050 $27,840 $22,500 $19,500 $80,300 $42,900 $298,950 $123,120 Product D $46,400 $2,905 $11,310 SO $67,100 $127,715 Working note: Expected Activity Product Product B 22,800 Product C 3,900 Product D 5,800 3,000 43 20 Labor-related Purchase order Parts management Board etching General factory Activity Rate $8.00 $35.00 $870.00 $30.00 $11.00 22 15 13 750 530 3,600 32 650 3,900 7,300 6,100