Question

Check my work Part 1 of 2 Required Information Exercise 4-11 Contrasting Activity-Based Costing and Conventional Product Costing (LO4-2, LO4-3, LO4-4] The following information applies to the questions displayed below.) points Rusties Company recently implemented an activity-based costing system. At the beginning of the year, management made the following estimates of cost and activity in the company's five activity cost pools: Skipped eBook Activity Cost Pool Labor-related Purchase orders Product testing Template etching General factory Activity Measure Direct labor-hours Number of orders Number of tests Number of templates Machine-hours Expected Overhead Cost $28,050 $ 2,100 $ 4,420 $ 1,250 $81,600 Expected Activity 1,870 DLHS 420 orders 260 tests 50 templates 10, 200 MHS References Exercise 4-11 Part 1 Required: 1. Compute the activity rate for each of the activity cost pools. Activity Cost Pool Labor-related Purchase orders Product testing Template etching General factory Activity Rate per DLH per order per test per template per MH

Answer 1

Answers

• [1]

	Activity Rates
Labor-related	$                      15.00	per DLHs
Purchase orders	$                        5.00	per orders
Product testing	$                      17.00	per tests
Template etching	$                      25.00	per templates
General factory	$                        8.00	per MHs

--Working

Activity Cost Pool	Activity Measure	Expected Overhead cost	Expected Activity		Activity Rates
		[A]	[B]		[A/B]
Labor-related	Direct labor-hours	$                  28,050.00	1,870	DLHs	$                                                       15.00	per DLHs
Purchase orders	Number of orders	$                     2,100.00	420	orders	$                                                         5.00	per orders
Product testing	Number of tests	$                     4,420.00	260	tests	$                                                       17.00	per tests
Template etching	No of templates	$                     1,250.00	50	templates	$                                                       25.00	per templates
General factory	Machine-hours	$                  81,600.00	10,200	MHs	$                                                         8.00	per MHs

• [2]

	Total
Product A	$    43,510.00
Product B	$    21,485.00
Product C	$    20,400.00
Product D	$    32,025.00

--Working

	Expected Activity	Activity Rates		Overhead Allocated
Activity Cost Pool	Product A
Labor-related	700	$                           15.00	per DLHs	$         10,500.00
Purchase orders	80	$                             5.00	per orders	$               400.00
Product testing	130	$                           17.00	per tests	$           2,210.00
Template etching	-	$                           25.00	per templates	$                        -
General factory	3,800	$                             8.00	per MHs	$         30,400.00
Amount of Overhead Cost assigned				$         43,510.00
	Expected Activity	Activity Rates		Overhead Allocated
Activity Cost Pool	Product B	[A/B]
Labor-related	170	$                           15.00	per DLHs	$           2,550.00
Purchase orders	60	$                             5.00	per orders	$               300.00
Product testing	55	$                           17.00	per part types	$               935.00
Template etching	36	$                           25.00	per boards	$               900.00
General factory	2,100	$                             8.00	per MHs	$         16,800.00
Amount of Overhead Cost assigned				$         21,485.00
	Expected Activity	Activity Rates		Overhead Allocated
Activity Cost Pool	Product C	[A/B]
Labor-related	500	$                           15.00	per DLHs	$           7,500.00
Purchase orders	130	$                             5.00	per orders	$               650.00
Product testing	-	$                           17.00	per part types	$                        -
Template etching	10	$                           25.00	per boards	$               250.00
General factory	1,500	$                             8.00	per MHs	$         12,000.00
Amount of Overhead Cost assigned				$         20,400.00
	Expected Activity	Activity Rates		Overhead Allocated
Activity Cost Pool	Product D	[A/B]
Labor-related	500	$                           15.00	per DLHs	$           7,500.00
Purchase orders	150	$                             5.00	per orders	$               750.00
Product testing	75	$                           17.00	per part types	$           1,275.00
Template etching	4	$                           25.00	per boards	$               100.00
General factory	2,800	$                             8.00	per MHs	$         22,400.00
Amount of Overhead Cost assigned				$         32,025.00