Sultan Company uses an activity-based costing system. At the beginning of the year, the company made...
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 | $ | 317,600 | 39,700 | DLHs | ||
| Purchase orders | Number of orders | $ | 9,900 | 220 | orders | ||
| Parts management | Number of part types | $ | 67,890 | 93 | part types | ||
| Board etching | Number of boards | $ | 76,000 | 1,900 | boards | ||
| General factory | Machine-hours | $ | 237,600 | 21,600 | 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:
| Expected Activity | ||||||||||||
| Activity Cost Pool | Product A | Product B | Product C | Product D | ||||||||
| Labor-related (DLHs) | 6,300 | 23,700 | 4,600 | 5,100 | ||||||||
| Purchase orders (orders) | 70 | 27 | 40 | 83 | ||||||||
| Parts management (part types) | 28 | 13 | 32 | 20 | ||||||||
| Board etching (boards) | 580 | 700 | 620 | 0 | ||||||||
| General factory (MHs) | 3,900 | 8,900 | 3,500 | 5,300 | ||||||||
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.
|
|||||||||||||||||||
2.
The equivalent units in the ending work in process inventory will be different under the FIFO and the weighted-average methods of process costing.
T/F?
Homework Answers
1. activity rate for each activity cost pool:
| Activity Cost Pool | Activity Rate | |
| Labor-related |
$8 |
per DLH |
| Purchase orders | $45 | per order |
| Parts management | $730 | per part type |
| Board etching | $40 | per board |
| General factory | $11 | per MH |
'Solution :
Activity rate = Expected
Overhead Cost/Expected Activity
Labor-related activity rate = $317600/39700 DLHs
Labor-related activity rate = $8 per DLH
Purchase orders activity rate = $9900/220 orders
Purchase orders activity rate = $45 per order
Parts management activity rate = $67,890/93 part types
Parts management activity rate = $730 per part type
Board etching activity rate = $76000/1900 boards
Board etching activity rate = $40 per board
General factory activity rate = $237600/21600 MHs
General factory activity rate = $11 per MH
2.
Total amount of overhead cost assigned to each product
| overhead cost allocated | ||||||||||||
| Activity Cost Pool | Product A | Product B | Product C | Product D | ||||||||
| Labor-related (DLHs) | $50400 | $189600 | $36800 | $40800 | ||||||||
| Purchase orders (orders) | $3150 | $1215 | $1800 | $3735 | ||||||||
| Parts management (part types) | $20440 | $9490 | $23360 | $14600 | ||||||||
| Board etching (boards) | $2320 | $28000 | $24800 | $0 | ||||||||
| General factory (MHs) |
$ 43900 |
$97900 | $38500 | $58300 | ||||||||
Solution :
Total overhead cost to a product = acti
vity rate * activity used by respective product.
Labor-related:
product A = $8 * 6300 = $ 50400
product B = $8 * 23700 =$189600
product C = $8 * 4600 =$36800
product D = $8 * 5100 =&40800
Purchase orders:
product A = $45 *70 = $3150
product B = $45 * 27 =$1215
product C = $45 *40 =$1800
product D = $45 * 83 =$3735
Parts management:
product A = $730 * 28 = $20440
product B = $730 *13 = $9490
product C = $730 *32 =$23360
product D = $730 * 20=$14600
Board etching:
product A = $40 * 580 = $2320
product B = $40 * 700 = $28000
product C = $40 * 620 =$24800
product D = $40 * 0 =$0
General factory:
product A = $11 * 3900 = $ 43900
product B = $11 * 8900 =$97900
product C = $11 * 3500 =$38500
product D = $11 * 5300 =$58300
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Sultan Company uses an activity-based costing system.
At the beginning of the year, the company made...
Sultan Company uses an activity-based costing system. At the beginning of the year, the company made...
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 $ 311,500 $ 8,840 $ 71,280 $ 63,700 $ 148,000 Expected Activity 44,500 DLHS 221 orders 99 part types 1,820 boards...
Sultan Company uses an activity-based costing system. At the beginning of the year, the company made...
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 Expected Measure Overhead Expected Activity Cost Pool Cost Activity Labor-related Direct labor-hours $380,000 38.000 DLHS Purchase orders Number of orders $11.935 217 orders Parts Number of part $ 79,500 1 06 part types management types Board etching Number of boards $93.000 1,860 boards General factory Machine-hours $240,500 18.500 MHS Required:...
Sultan Company uses an activity-based costing system At the beginning of the year, the company made...
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 Expected Measure Overhead Expected Activity Cost Pool Cost Activity Labor-related Direct labor-hours $ 148,000 29,600 DLHs Purchase orders Number of orders $ 15,180 253 orders Parts management Number of part types $ 85,680 102 part types Board etching General factory Number of boards Machine-hours $ 99,550 $ 162,400 1,810 boards...
Sultan Company uses an activity-based costing system. At the beginning of the year, the company made...
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:
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 Measure Expected Overhead Expected Activity DLHS Activity Cost Pool Cost 135,600 24 Labor-related Direct labor-hours 22,600 $ 8,400 $ 68,870 240...
Sultan Company uses an activity-based costing system. At the beginning of the year, the company made...
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 Measure Expected Overhead Expected Activity Activity Cost Pool Labor-related Purchase orders Parts management Cost Direct labor-hours Number of orders Number of part types S 284,000 35,500 DLHs $ 6,790 S 194 orders 71,340 82 part types Number of boards Machine-hours S 57,900 $ 229,900 20,900 MH:s 1,930 boards Board etching...
Sultan Company uses an activity-based costing system. At the beginning of the year, the company made...
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 $ 311,500 $ 8,840 $ 71,280 $ 63,700 $ 148,000 Expected Activity 44,500 DLHS 221 orders 99 part types 1,820 boards...
Sultan Company uses an activity-based costing system. At the beginning of the year, the company made...
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 $ 231,600 $ 15,015 $ 95,200 $ 106,800 $ 184,500 Expected Activity 38,600 DLHS 231 orders 112 part types 1,780 boards...
Sultan Company uses an activity-based costing system. At the beginning of the year, the company made...
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 $ 311,500 $ 8,840 $ 71,280 $ 63,700 $ 148,000 Expected Activity 44,500 DLHs 221 orders 99 part types 1,820 boards...
Sultan Company uses an activity-based costing system. At the beginning of the year, the company made...
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 $ 174,000 34,800 DLHs Purchase orders Number of orders $ 7,200 240 orders Parts management Number of part types $ 66,500 95 part types Board etching Number of boards $ 64,800 1,620 boards General factory Machine-hours $ 115,200...
Sultan Company uses an activity-based costing system. At the beginning of the year, the company made...
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...
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 $ 311,500 $ 8,840 $ 71,280 $ 63,700 $ 148,000 Expected Activity 44,500 DLHS 221 orders 99 part types 1,820 boards...
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 Expected Measure Overhead Expected Activity Cost Pool Cost Activity Labor-related Direct labor-hours $380,000 38.000 DLHS Purchase orders Number of orders $11.935 217 orders Parts Number of part $ 79,500 1 06 part types management types Board etching Number of boards $93.000 1,860 boards General factory Machine-hours $240,500 18.500 MHS Required:...
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 Expected Measure Overhead Expected Activity Cost Pool Cost Activity Labor-related Direct labor-hours $ 148,000 29,600 DLHs Purchase orders Number of orders $ 15,180 253 orders Parts management Number of part types $ 85,680 102 part types Board etching General factory Number of boards Machine-hours $ 99,550 $ 162,400 1,810 boards...
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:
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 Measure Expected Overhead Expected Activity DLHS Activity Cost Pool Cost 135,600 24 Labor-related Direct labor-hours 22,600 $ 8,400 $ 68,870 240...
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 Measure Expected Overhead Expected Activity Activity Cost Pool Labor-related Purchase orders Parts management Cost Direct labor-hours Number of orders Number of part types S 284,000 35,500 DLHs $ 6,790 S 194 orders 71,340 82 part types Number of boards Machine-hours S 57,900 $ 229,900 20,900 MH:s 1,930 boards Board etching...
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 $ 311,500 $ 8,840 $ 71,280 $ 63,700 $ 148,000 Expected Activity 44,500 DLHS 221 orders 99 part types 1,820 boards...
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 $ 231,600 $ 15,015 $ 95,200 $ 106,800 $ 184,500 Expected Activity 38,600 DLHS 231 orders 112 part types 1,780 boards...
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 $ 311,500 $ 8,840 $ 71,280 $ 63,700 $ 148,000 Expected Activity 44,500 DLHs 221 orders 99 part types 1,820 boards...
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...
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