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:

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 orders Purchase orders Number of orders Number of part types 97 part types Parts management $ 53,700 $171,000 Board etching General factory Number of boards Machine-hours 1,790 boards 19,000 MHs Requlred: 1. Compute the activity rate for each of the activity cost pools. Activity Rate Activity Cost Pool 6 per DLH Labor-related 35 per order Purchase orders 710 per part type Parts management Board etching 30 per board 9 per MH General factory %24 %24

Answer 1

Calculate overhead cost assigned

Activity cost pool	Product A	Product B	Product C	Product D
Labor related	18000	71400	22200	24000
Purchase orders	2555	1190	1155	3500
Parts management	16330	10650	34790	7100
Board etching	14400	23100	16200	0
General factory	32400	54000	31500	53100
Total overhead cost	83685	160340	105845	87700